The competition watchdog has found “troubling” evidence of potential mis-selling and unfair contract terms in the leasehold sector.

It is concerned that owners of leasehold properties have been treated unfairly and buyers have been misled by developers.

The Competition and Markets Authority says it is planning to launch enforcement action against developers.

Its key areas of concern include escalating ground rent clauses which in some cases see charges double every 10 years, making it difficult for leaseholders to sell their homes.

The CMA says it has also seen evidence that people have been misled about the cost of buying the freehold. 

At the point of purchase, some people were told the freehold would cost only a small sum, but later down the line this price had increased by thousands of pounds, the watchdog says.

It has also criticised developers for failing to explain the differences between buying leasehold and freehold, with some firms even telling buyers there is no real difference.

The CMA says certain firms failed to properly set out the charges to buyers.

In some cases the maintenance fees are “excessive and disproportionate”.

Leaseholders may also be charged for securing the right to carry out home improvements.

CMA chief executive Andrea Coscelli says: “We have found worrying evidence that people who buy leasehold properties are being misled and taken advantage of.

“Buying a home is one of the most important and expensive investments you can make, and once you’re living there you want to feel secure and happy. 

“But for thousands of leasehold homeowners, this is not the case. 

“We’ll be looking carefully at the problems we’ve found, which include escalating ground rents and misleading information, and will be taking our own enforcement action directly in the sector shortly.”

The CMA is undertaking the legal work required to launch direct enforcement action against companies it believes have broken consumer protection law. 

This could result in firms signing legal commitments to change how they do business.

If they fail to make the required changes, the CMA could take action through the courts to make them comply with the law.

NAEA Propertymark chief executive Mark Hayward says: “We have long called for action to be taken to help leaseholders who have been misled and treated unfairly. 

“For too long, housebuilders and developers have not been transparent enough about what it actually means to buy a leasehold, which in turn has meant many owners have been faced with escalating ground rents and unreasonable fees, leading them into financial difficulty. 

“Our research shows three in five (62 per cent) leaseholders feel they were mis-sold and therefore it’s vital enforcement action takes place as soon as possible to give some hope to those who are currently trapped with no easy route out.”

The National Leasehold Campaign founders have welcomed the news.

Katie Kendrick says: “We would like to thank the CMA for this work and for listening to us – we know it will not be a quick fix but are ready to help in any way we can. 

“We have the evidence and are not too battle weary to continue with this fight.  

It is really refreshing to hear our claims validated by the CMA today. 

“Whilst the government proposes to ban future houses being sold leasehold in the future we can not and will not allow them to forget those who are already trapped through no fault of their own.”

The NLC hopes that the CMA enforcement results in some form of compensation for those already trapped in mis-sold leasehold properties.  

Jo Darbyshire says: “Information critical to my decision making was deliberately withheld at the point of sale. 

“Had I been given that information I would have bought my freehold from the developer for  around £5,000. 

“They sold my freehold on and now it will cost thousands more. 

“It’s time for them to do the right thing and make sure I’m not financially disadvantaged as a result of their systematic mis-selling.”

The NLC wants to ensure that compensation is paid to leaseholders who had little choice but to pay over the odds to buy their freehold in order to move on with their lives.

Cath Williams adds: “I needed to move but was advised by the estate agent that finding a buyer for a leasehold house would be difficult and its value was £20,000 less than the freehold market. 

“I had absolutely no option but to buy the freehold and it cost me a total of £15,000 to include both sets of legal fees.

“I had to borrow from family. I want that money back because my house should never have been leasehold in the first place.”