News that four major housebuilders are in the sights of the Competition and Markets Authority (CMA) over the way leasehold properties were sold has uncomfortable echoes of the PPI scandal which hit the banks after the financial crisis.

Shares in the quartet, Barratt Developments (BDEV), Countryside Properties (CSP), Persimmon (PSN) and Taylor Wimpey (TW.), have fallen between 4% and 8% since the probe was announced on 4 September.

The CMA is launching enforcement action having uncovered ‘troubling evidence’ of potentially unfair terms concerning ground rents in leasehold contracts and potential mis-selling.

It also said leasehold homeowners may have been unfairly treated and that buyers may have been misled by developers.

All four of the named companies have pledged to co-operate with the investigation which could result in them being forced to give legal commitments to change the way they do business or potentially face court action.

The timeline and eventual outcome are still highly uncertain which means this will remain a cloud hanging over the sector until it is resolved.

In 2017 the Government said it would outlaw the practice of selling leaseholds on new homes and the same year Taylor Wimpey set aside £130 million to settle disputes over ground rents on leaseholds.

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