The Competition and Markets Authority has written to Countryside and Taylor Wimpey to say that certain leasehold terms must be removed from contracts.

Specifically, the CMA says the terms that mean ground rent doubles every 10 or 15 years break consumer law.

It explains that such terms means people struggle to sell or mortgage their homes more than they would otherwise, and that they affect property rights.

As well as removing the terms from existing contracts, Countryside and Taylor Wimpey are being asked to agree that these terms are not used in any future contracts.

The regulator adds that it is also investigating firms, including investment companies, that have bought freeholds from Countryside and Taylor Wimpey and continue to operate the same contract terms.

The opening of the CMA’s case against four housebuilders for allegedly mis-selling leasehold terms was first announced in early September last year.

As well as targeting Countryside and Taylor Wimpey, the CMA opened investigations on Persimmon Homes and Barratt Developments. The regulator says that it has not yet reached a view on whether these two latter companies “have been involved in any or all of” the practices it is looking at.

CMA chief executive Andrea Coscelli comments: “These ground rent terms can make it impossible for people to sell or get a mortgage on their homes, meaning they find themselves trapped. This is unacceptable. Countryside and Taylor Wimpey must entirely remove all these terms from existing contracts to make sure that they are on the right side of the law.

“If these developers do not address our concerns, we will take further action, including through the courts, if necessary.”

And housing secretary Robert Jenrick adds: “The government is pursuing the most significant reforms to leasehold in forty years, including by protecting future homeowners, restricting ground rents in new leases to zero and ending the use of leasehold in new houses altogether.”