The U.K. competition watchdog has told two of the U.K.s biggest homebuilders to remove contract terms that leave residents with spiraling costs.

The Competition and Markets Authority has written to

Countryside Properties Plc and

Taylor Wimpey Plc that terms which double a fee called ground rent for leaseholders every ten or fifteen years must be removed from all existing contracts. The companies must also agree not to use those terms in any future contracts, the watchdog said in a statement on Friday.

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, said Andrea Coscelli, chief executive officer of the CMA. If these developers do not address our concerns, we will take further action, including through the courts, if necessary.

The findings come after the CMA launched enforcement action against four housing developers in September last year over the possibility of their using unfair contract terms, and mis-selling homes to leaseholders. The watchdogs investigation into the other two homebuilders, Barratt Developments Plc and Persimmon Plc, is still ongoing.

The U.K. has moved to crackdown in recent months on the use of ground rents, an annual sum which buyers pay to the owner of the land on which the property stands. In some cases, home buyers have then been unable to sell once they found out the fee doubled every decade. In January, the government announced that they would give 4.5 million people the ability to

effectively cancel the fees on homes as part of an overhaul of the leasehold system.

Read more on the investigation

Taylor Wimpey said in an emailed statement that we will continue to cooperate with the CMA and work with them to find a satisfactory resolution, within the required timescale. Countryside didnt immediately respond to a request for comment.

(Adds government moves in fifth paragraph.)

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