UK homebuilder Taylor Wimpey drops rent-doubling clauses after settlement

(Reuters) -Britain’s no. 3 homebuilder Taylor Wimpey will drop contract terms that lock leaseholders into rents that double every 10 years, ending an over year-long probe into the firm by the UK competition watchdog, the regulator said on Wednesday.

The Competition and Markets Authority (CMA) had launched an investigation in September last year, filing cases against homebuilders Barratt Developments Plc, Persimmon Plc and Countryside Properties Plc as well.

In September, Countryside agreed to drop similar terms, while in June, Persimmon and a fund managed by Aviva also closed the case with the regulator.

CMA said ground rents of the affected Taylor Wimpey leaseholders will no longer increase and will remain at the amount charged when they first bought their home.

In a separate statement, Taylor Wimpey said the cost of dropping the clause falls within the provisions it earmarked in 2017 to cover the same. The company also said its agreement with the regulator did not imply infringement of UK consumer law.

The CMA, meanwhile, said the probe against Britain’s largest homebuilder Barratt over possible mis-selling of leasehold homes was ongoing.

(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Devika Syamnath)