The Competition and Markets Authority has opened cases against four housebuilders for allegedly mis-selling leasehold homes.

The CMA says that is has “uncovered troubling evidence” that Barratt Developments, Countryside Properties, Persimmon Homes, and Taylor Wimpey potentially included unfair terms in their leasehold contracts and that homeowners “may have been unfairly treated”, while buyers could have been “misled”.

Specifically, it says that the terms of ground rents were not sufficiently explained and that people were misled over the cost of converting a leasehold to a freehold.

The CMA adds that it has also found evidence that some people understood houses on an estate to be sold as leasehold “when they were in fact later sold as freeholds to other buyers.” It also says that developers have used unfair sales tactics and that escalating ground rents are a feature of unfair contract terms.

Ground rent increases based on the retail price index is also something the CMA is looking into and may take action against, it says.

The CMA has written to the four companies requesting information. It says that the outcome of the case, including the possibility of taking the housebuilders to court, will depend on its assessment of the information it receives.

CMA chief executive Andrea Coscelli comments: “It is unacceptable for housing developers to mislead or take advantage of homebuyers. That’s why we’ve launched today’s enforcement action.

“Everyone 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.”

NAEA Propertymark chief executive Mark Hayward says: “It’s promising to see the CMA is taking enforcement action against four house builders on the grounds of mis-selling and unfair contract terms in relation to leasehold homes.

“The NAEA Propertymark Leasehold: A Life Sentence? report revealed three in five (62 per cent) leasehold property owners felt they were mis-sold and a further 93 per cent wouldn’t buy another leasehold property.

“This means that for too long house builders and developers have not been transparent enough about what it means to buy a leasehold property, leaving many in financial difficulty as they have become trapped in confusing contracts with their freeholder.”