StockMarketWire.com - Shares in some of Britain's biggest house builders slumped on Friday after the country's competition regulator said it had uncovered 'troubling evidence' of unfair terms and potential mis-selling in the sector.

The UK's Competition and Markets Authority said it had launched enforcement action against four house builders: Barratt Developments, Countryside Properties, Persimmon and Taylor Wimpey.

The regulator said it had identified 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.

Among its findings, the CMA said developers were failing to explain clearly what ground rent was, whether it increased over time, when increases would occur and by how much.

It also said people had been being misled about the availability and cost of freehold properties.

Alleged unfair sales tactics included unnecessarily short deadlines to complete purchases in order to secure a deal.

The CMA probe also discovered 'the use of unfair contract terms that mean homeowners have to pay escalating ground rents, which in some cases can double every 10 years'.

In early trading, Barratt fell 3.2% to 522p, Countryside shed 1.3% to 321.27p, Taylor Wimpey reversed 1.2% to 119.39p and Persimmon dropped 2.2% to £25.82.

Two of the four companies -- Barratt and Taylor Wimpey -- swiftly issued statements to the stock exchange, confirming their involvement in the probe.

Taylor Wimpey said: 'The board takes this very seriously and Taylor Wimpey will continue to fully cooperate with the CMA, provide the further information to be requested by the CMA in the coming weeks and work with them to better understand their position.'

Another big house builder, Berkley, fell 1.0% to £46.04, even though it was not involved in the investigation.

Berkley also separately announced on Friday that 'resilient' trading supported its existing guidance of £500m pre-tax profit for its financial year ended 30 April.

Berkley said it now expected a more even split between the first and second halves of the year, amid assistance from the government's temporary removal of stamp duty and its Help-to-Buy support subsidy. At 8:54am:

[LON:BDEV] Barratt Developments PLC share price was +0.9p at 540.3p

[LON:BKG] Berkeley Group Holdings The PLC share price was +31p at 4679p

[LON:PSN] Persimmon PLC share price was -18.5p at 2622.5p

[LON:TW.] Taylor Wimpey PLC share price was +0.35p at 121.2p



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