Ground Rents Income Fund plc
Competition and Markets Authority - Leasehold Housing Market Investigation
Ground Rents Income Fund PLC ("the Company") notes the update report published on Friday 28 February 2020 by the Competition and Markets Authority ("CMA"), which is investigating alleged misleading selling practices and unfair consumer terms in the leasehold housing market.
As stated in the Annual Report and Financial Statements for the year ended 30 September 2019, the Company has openly and transparently assisted the CMA to develop its understanding of the leasehold market.
The Company welcomes many of the steps Government, the Law commission and the CMA intend to take to stamp out poor practice in the housebuilding industry concerning leasehold houses, to protect consumers in the home sale process and to improve standards and transparency in residential property management sector.
The Directors are wholly supportive of reform that delivers an equitable, transparent and better experience for homeowners. The Company has therefore been proactive in addressing consumer concerns regarding onerous ground rents. For example, since September 2017 the Company has implemented an asset management plan to offer residential leaseholders with doubling ground rents, regardless of review cycle, the opportunity to convert their existing doubling review mechanism to the lesser of inflation, as measured by the Retail Prices Index (RPI), or doubling, while retaining their existing review cycle.
In March 2019 the Company signed the Government's 'Public Pledge for Leaseholders', which we believe is an important step towards positive change reflecting our desire to bring about sensible, well-thought-out reform. The Pledge essentially extends the Company's asset management plan indefinitely.
The Company is committed to working with Government, the Law Commission and the CMA to appropriately reform the industry and to support existing leaseholders, working towards meaningful reform that protects all stakeholders in the sector.
The Company notes that the CMA investigation is ongoing and that the timescale and specific outcome of the investigation, together with the resultant impact on the Company and its underlying portfolio, is uncertain. The Company will consider the CMA report further with its advisors and keep shareholders advised of progress. The Board continues to advocate for leasehold reform that strikes a fair balance for all stakeholders in the sector.
Contacts:
Schroder Real Estate Investment Management Limited
James Agar / Matthew Riley
020 7658 6000
N+1 Singer (Broker)
James Maxwell / Ben Farrow
020 7496 3000
Tavistock (Media)
James Whitmore / Jeremy Carey
020 7920 3150
Appleby Securities (Channel Islands) Limited (Sponsor)
Andrew Weaver
01481 755 600
