Thousands of flat owners are set to benefit after two major developers agreed to remove punishing leasehold clauses that often leave buyers unable to sell their homes.
Aviva and housebuilder Persimmon Homes have both agreed to reform their leasehold terms for new and existing homeowners.
The Competition and Markets Authority (CMA) said Aviva - which invested in freeholds from developers - has agreed to remove ground rent terms considered unfair and repay homeowners who saw rents doubled.
Persimmon has also agreed to offer leasehold homeowners the opportunity to buy the freehold of their property at a discounted price.
The CMA said the "landmark commitments" would benefit thousands of leaseholders.
The regulator, which launched enforcement action against four housing developers last September, warned the wider sector to review its practices or face legal action.
It is continuing to investigate housebuilders Countryside, Taylor Wimpey and Barratt Developments over the possible mis-selling of leasehold properties.
The CMA has also written to three more investors in freeholds - Brigante Properties, Abacus Land and Adriatic Land - calling for them to remove doubling ground rent terms from their contracts.
It ordered the firms to remove "deeply unfair" clauses that allow them to double ground rent for homeowners every decade.
Andrea Coscelli, chief executive of the CMA, said: "This is a real win for thousands of leaseholders - for too long people have found themselves trapped in homes they can struggle to sell or been faced with unexpectedly high prices to buy their freehold.
"Now, they can breathe a sigh of relief knowing things are set to change for the better."
He added: "But our work isn't done. We now expect other housing developers and investors to follow the lead of Aviva and Persimmon. If not, they can expect to face legal action."
Campaigners have called for leaseholds to be banned on new builds, and the Government has said previously it would work to end the practice, which has been described as the housebuilders' equivalent of the payment protection insurance (PPI) mis-selling scandal.
The CMA said that as a result of the increases in ground rent, terms built into contracts, it means people can struggle to sell or mortgage their homes, and risk becoming trapped.
Housing Secretary Robert Jenrick said: "This settlement with Aviva and Persimmon is a hugely important step and demonstrates our commitment to support existing leaseholders who may have been mis-sold properties.
"We have also introduced new legislation that will protect future homeowners by restricting ground rents in new leases to zero and I would strongly urge other developers to follow suit in amending their historic practices."
