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The competition regulator has launched enforcement action against four of the UK鈥檚 biggest housebuilders over the potential mis-selling of leasehold homes with escalating ground rent charges.

The Competition and Markets Authority (CMA) said in a statement issued this morning that it had 鈥渢roubling evidence鈥� the four housebuilders 鈥� Barratt, Countryside, Persimmon and Taylor Wimpey 鈥� had unfairly treated owners of leasehold homes and misled home buyers.

The investigation relates to practices first uncovered in 2017, when it became clear that some housebuilders had been selling houses as leasehold, rather than freehold, and that the leases in many cases contained potentially onerous terms. In particular a number of lease contained clauses setting out that ground rent charges would double every ten years 鈥� potentially making homes unsellable.

The CMA announced it was looking into the practice of selling leasehold homes with onerous clauses in February this year. Today it said this investigation had unearthed evidence that housebuilders had failed to properly explain ground rent to buyers, had failed to make clear properties could be purchased freehold, had misled people about the cost of later re-purchasing their freehold and had used high-pressure sales tactics. It also said housebuilders appeared to have employed contracts with unfair terms.

As well as the four named housebuilders, the CMA said it will be investigating 鈥渃ertain firms who bought freeholds from these developers and have continued to use the same unfair leasehold contract terms鈥�.

One of the principle complaints of buyers affected by the scandal has been that when they have later sought to purchase their freehold title, they have been told the housebuilder has sold the freehold on to a ground rent fund, which has refused to sell, or offered to sell only at a prohibitively high price.

Taylor Wimpey in 2018 set aside 拢130m to compensate buyers of leasehold homes, and last year was among 40 property developers pledging to stop the use of onerous 鈥渄oubling clauses鈥� in leases.

Housing secretary Robert Jenrick welcomed the announcement by the CMA, and reiterated that the government was introducing legislation to ensure the practices were outlawed.

He said: 鈥淪hameful practices of the kind set out by the CMA have no place in our housing market and we are going to put an end to them.鈥�

鈥淭he government asked the CMA to conduct this investigation and I strongly welcome the action to tackle mis-selling in the leasehold sector and want to see homeowners who have been affected by crippling ground rents swiftly obtain the justice and redress they deserve.

Andrea Coscelli, CMA chief executive, said it was 鈥渦nacceptable鈥� for housing developers to mislead or take advantage of homebuyers. He said: 鈥淓veryone involved in selling leasehold homes should take note: if our investigation demonstrates that there has been mis-selling or unfair contract terms, these will not be tolerated.鈥�

The CMA has written to Barratt, Countryside, Persimmon, and Taylor Wimpey outlining its concerns and requiring further information, though it said it has not yet reached a conclusion as to final guilt or not of any of the named companies.

If the firms are found guilty and are found not to have changed their practices, the CMA has the power to force legal commitments from the companies to reform, or if necessary, to take them to court.

The CMA said it had also written to a number of other developers, which it did not name, encouraging them to review their practices to make sure they are treating consumers fairly and complying with the law.

Barratt, Countryside and Taylor Wimpey all this morning issued statements noting the commencement of enforcement action, and stating they will co-operate with the CMA鈥檚 investigation.

Taylor Wimpey鈥檚 statement said: 鈥淭he board takes this very seriously and Taylor Wimpey will continue to fully cooperate with the CMA, provide the further information to be requested by the CMA in the coming weeks and work with them to better understand their position.鈥�

Countryside said it was 鈥渃ommitted to resolving this issue to the satisfaction of our customers and will continue to co-operate fully with the CMA鈥檚 ongoing investigation,鈥� while Barratt said: 鈥淭he group is committed to putting its customers first and will continue to cooperate with the CMA whilst it completes its investigation.鈥�

At the time of writing, Persimmon had not yet responded to the CMA announcement.