Survey on onerous ground rent data. Please fill this in if you have a leasehold house with exploitative ground rent terms
Taylor Wimpey has revised its sales team’s information leaflet to buyers of leasehold apartments at Sapphire Fields, in Oxfordshire.
New guidelines – apparently introduced on December 20, the day of the leasehold debate in the House of Commons – seek to make consumers more aware of what they are buying.
The leases here only apply to flats, as Taylor Wimpey is selling freehold houses at Sapphire Fields, part of 3,300 new homes at its Great Western Park development on the edge of Didcot.
Indeed, following LKP’s exposure of the company’s doubling ground rent scandal, Taylor Wimpey has announced that it has ceased the construction of leasehold houses form January 1.
[Leasehold houses have spread across the country – Persimmon being the main offender – as developers leap at the chance of creating an investment asset class at the expense of their own customers.]LKP reproduces the information about leasehold terms, and adds a little more information in italics below”
“The lease is 125 years”
This is a short lease, which means the developer is creating an investment asset class at the expense of its own customers.
Leases will evaporate in value if they get below 80 years, so the lease will have to be extended. That means an income stream for whoever owns the freehold.
The ground rent is £250pa and is “reviewed” (increases) every ten years in line with the Retail Price Index.
Customers should ask themselves: what service is the ground rent for?
This is a question asked of MPs by Philip Rainey QC.
Absolutely nothing, according to small retirement housebuilder Bob Bessell, who thinks ground rents are wrong. https://www.leaseholdknowledge.com/tag/bob-bessell
Taylor Wimpey won’t retain ownership of the freehold “in common with most developers”.
So the freehold will be sold to a life insurance company such as Aviva (if you are lucky), or to murkier investors, sometimes offshore (if you aren’t).
LKP estimates that housebuilders earn £300-£500 million a year through ground rent sales.
You are strongly advised that you should take independent legal advice
Hear, hear. And that means not appointing a solicitor recommended by any developer. That in itself is a reason not to employ that particular firm.
Leasehold conveyancing is complicated and deeply flawed, according to the Conveyancing Association. It is very important that you chose a solicitor experienced in leasehold. Contact LKP if necessary.
Anything else a leasehold buyer should know?
Yes, and quite a lot actually.
Buying a leasehold flat means that you are a tenant, just a long term one. But all issues go down the rabbit hole of landlord and tenant law, quite unlike a real freehold homeowner.
Investors in freeholds are buying far more than ground rents, and pay handsomely for them.
Why?
With a minority investment in a block of flats (often less than 5 per cent of the collective value of the flats) they control the site.
This means the freeholder appoints the property management company. That is unless Sapphire Fields leases have a residents’ management company (RMC) incorporated.
Taylor Wimpey London made a complete mess of these RMCs which ended up excluding the leaseholders and being owned by Roger Southam, then proprietor of Chainbow and, inexplicably, the chairman of the taxpayer-funded Leasehold Advisory Service.
Mr Southam was named in the Commons by Sir Peter Bottomley on December 20.
If a freeholder controls the management of the site he is on to a winner: management contract, insurance commissions, deals with contractors.
These can be worth far more than the ground rents as developers, who draw up the leases, know very well.
So who buys leasehold?
Ordinary people. First-time buyers. The old. The single. The poor. Or, in prime central London, the rich.
It is very rare indeed to encounter anyone employed in the leasehold game who does not own their home freehold.
Related posts:
Last year: £64.8bn leasehold properties sold. £13.7bn was new-build. Leasehold house numbers double. Developers make £300-500 million a year from ground rent sales
I had to spend £14,000 to change double ground rent to RPI at Ausden Place. But will I get compo from Taylor Wimpey?
Taylor Wimpey CEO to meet MPs over ‘cancer’ of doubling ground rents (which were deterring astute buyers in 2007!)
Taylor Wimpey abandons the leasehold houses racket from January 1
Sajid Javid pledges Help To Buy clampdown on ‘feudal’ leasehold terms
Shaken ground rent whistleblower pulls out of BBC radio interview after lawyer’s letter
Does leasehold not meet the definition of Mrs May’s “everyday injustices”? What is the Conservative Party going to do about it?
My prediction: nothing of any substance.
Excellent point! “Every day injustices ” in a grand scale.
Paul, that is exactly what crossed my mind earlier on today.
The more one investigates the worse it gets. They (Taylor Wimpey( even admitting, now in writing, they always intend to sell a freehold – so their promises to House Leasehold Purchasers of buying the Lease in a couple of years for say approx. £4K, was absolute lies as they knew the freehold would be sold to a ground rent muncher by then, and we know what the munchers want for a freehold purchase. I bet the deal wit a muncher is already done before the houses are even built.. The “business scam, sorry, plan, is all in place before a brick is laid.
I note the reference to leasehold is not very prominent in the sales team info leaflet. I also downloaded a sales brochure and cannot see anything in their that highlights leasehold.
Also when they say GR of £250pa will increase by RPI in year 10 they should give a monetary example so the lease purchaser fully understands what they are walking into
I couldn’t agree more Trevor. These individuals are going to have to be dragged kicking and screaming to the altar of ‘Honourability’ for the beleaguered, shafted leaseholders to be recompensed. BOYCOTT TW and picket outside their offices / show homes ( peacefully of course) . This scandal should be afforded the same revolt as the disgraced ‘Poll Tax’. The Thousands of affected leaseholders should organise a demonstration that should be held in London as It will garner more media coverage ( sad but true).I will march in solidarity even though I am unaffected by this scandal, other than I cannot bear injustice! COME ON PEOPLE, SHOW YOUR STRENGTH!!
This should be interesting, will you be leading the Taylor Wimpey Martyrs.
I hope it does not replicate the Monmouth Rebellion and bring back another Judge Jeffreys
At least with all this shocking publicity TW are going to have to do something to protect their image, or what remains of it. Sir Frank Taylor must be turning in his grave.
I hope that the TW Directors follow this website, if they do I would urge them to take some urgent action as to compensating their unfortunate customers who have had their lives blighted. Time is fast running out for them to take this action.
Michael, I can vouch that I will certainly support the leaseholders shafted by TW by joining them on their demonstration and picketing the ‘Show homes’ of these unscrupulous operators. TW reputation is irrevocably tarnished and who gives a shite whether”Sir Frank” is “Turning in his grave”. I am quite sure that the shafted leaseholders do not! Michael, with respect, it’s time to stop reminiscing about ‘All your yesterdays’. OK? You can “Urge” TW all you like – It doesn’t amount to a hill of beans.
Kim, You can deal with it your way, and I shall continue my way. But please aim all your flack at TW and not some at me.
I have contacted many different organisations, Government, MPs and TW themselves to get something going. I have correspondence with the TW hierarchy on this subject.. It may help, it may not. But your criticism will not make me give up.
When will your first protest march be taking place?
The fact that TW have just issued this revised Leasehold/Ground Rent statement is an admission by them that they got it wrong.
They now pass the onus onto the Purchaser and the Purchasers chosen Solicitor, releasing themselves of any responsibility.
Previously the onerous terms were played down and the Purchaser was encouraged to use the TW Solicitor who would not highlight these conditions.
This is a TW U-Turn
So now TW need to put the situation right with those who have suffered.
Michael, stop being so thin skinned. I was not criticising you ,however you are not above criticism.simply beacuse………? The TW ‘Hierarchy ‘ of whom you speak are clearly a dishonourable bunch, so good luck with them. If you read my posts You will find they are crystal clear E.G.- “The shafted leaseholders should organise a demonstration and I will support them on that demo and picketing the ‘Show Homes’ of these spivs”. I suggest you put your question of when the demo takes place to a shafted leaseholder and hope that you will urge them to take this action.
aaaaah, so that’s ok now then. TW are now making it quite clear that the onus is on the solicitors to pick up on any “unacceptable wrongdoings” the builder/landlord may have in a lease (concerns flats only now of course – if they also keep to their word when they start building the “new villages”)
This releases themselves (TW) of any responsibility, as we have “been warned”.
As a responsible customer caring company there should not be any need for a solicitor to have to examine the lease with a magnifying glass.
And yes, there is a mammoth task ahead for them to put things right for hundreds of leaseholders who were sold down the river and have had their lives ruined.