The Taylor Wimpey ground rent scandal featured on BBC R4’s influential You & Yours programme yesterday.
But its explanation that doubling ground rents compared to those linked to RPI amounted to “slightly less than 1% of the average sales value of the property” was dismissed as “not true”.
The programme interviewed first-time buyer Clair Scott, one of 24 buyers at Taylor Wimpey’s Silver Birch Close development in Lostock, Bolton, where ground rents double every ten years from an initial £295 a year to £9,440 in 2060. The houses are now difficult, if not impossible to sell.
But Taylor Wimpey repeated to the BBC what it had already told LKP and the All Party Parliamentary Group on leasehold reform last week:
“These leases were introduced in 2007 with an average difference in capital value compared to a Retail Price Index lease of slightly less than 1% of the average sales value of the property,” said Taylor Wimpey.
Louie Burns, of Leasehold Solutions, which specialises in enfranchisement and lease extensions, said:
“We have had specialist enfranchisement lawyers and valuers trying to decipher Taylor Wimpey’s statement and we still do not understand the clear meaning of their press release.
“It is not true.
“The ground rent in Clair’s case if it was linked to an RPI multiple would have been £700 in the 50th year not £9,500.”
In a package called “The homeowners who can’t sell their homes because of soaring ground rents”, You and Yours referenced MPs accusing Taylor Wimpey of “sharp practice” and “corporate irresponsibility”.
Miss Scott, who gave evidence last week to the All Party Parliamentary Group on leasehold reform and was reported on LKP here, said of the doubling ground rent: “At no point was this raised by our solicitors that this was a particularly severe issue and it could have resale issues in future.
“At no point were we told that we could buy the freehold.”
Miss Scott, who is pregnant, said buyers of her house had pulled out after their lawyers read the ground rent terms. Mortgage lenders would not advance loans to these properties, it was claimed.
Taylor Wimpey sold the freehold to the site for £176,000 to E & J Capital Partners, based in Winchester When Miss Scott approached them to buy the freehold to her house she was told it would cost £46,000.
Miss Scott, who appeared upset during the interview, was asked what effect the issue is having on her: “Many sleepless nights. It is extremely stressful. We won’t be able to sell the house. Solicitors will be telling their clients not to buy houses like this. So this does not go away for us.”
It is understood that a senior executive of Taylor Wimpey has now offered to meet Miss Scott to progress a way forward.
Mr Burns was asked why developers are building leasehold houses rather than freehold ones:
“To make money,” he replied.
“Developers offer these terms because they make additional money on them. The ground rents are ridiculously onerous on those terms, but they [developers] all do it.”
Mr Burns has written about the perils of lease extensions on the LKP
Statement to BBC from Taylor Wimpey
“These leases were introduced in 2007 with an average difference in capital value compared to a Retail Price Index lease of slightly less than 1% of the average sales value of the property.
We reviewed this mechanism for ground rent increases in 2011 and decided that the RPI was a more appropriate measure going forward. All Taylor Wimpey homes on developments commenced after 2011 have been sold with ground rent increases linked to the RPI. All purchasers have independent legal advice from a firm of solicitors when purchasing a property from us.
Until recently, we hadn’t been aware of the concern of some customers and homeowners regarding these pre-RPI clauses and the difficulties that they are currently experiencing in selling or mortgaging their homes. While we understand that this is an industry-wide issue, having heard the cases described and in order to establish the facts, we are undertaking a review of this situation as it relates to our customers.
We will be liaising with the affected customers, including Ms Scott, as part of this review in order to understand the detail behind their freehold valuations.”
Related posts:
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 more greedy than the ground rent ‘Mr Smallweeds’ (and so are other plc housebuilders)
Bottomley tells Taylor Wimpey to explain ‘sharp practice’ ground rents – and asks for names of directors who approved them
Taylor Wimpey CEO says doubling ground rent scandal under ‘review’. But Bottomley asks: ‘Have innocent homebuyers been shafted?’
Pensioner paid £38,000 for Taylor Wimpey freehold to ground rent speculators E&J Capital Partners
Ban revenue-generating leasehold houses, says Justin Madders MP. Redrow responds
I think that Taylor Wimpey would be best sorting out this problem in a fair way, right now.
To give vague explanations or excuses will only dig the hole deeper. People are already comparing them to some other very dodgy operators that get criticised on here.
Of course the main concern should be for those house purchasers who have suffered already.
Personally, as one of the old Taylor Woodrow family I still have faith, and I am sure many of us are disappointed to read of the difficulties these unfortunate customers are having
Unfortunately none of these issues should be left open ‘to do the right thing’. That’s just not the real world we live in. It’s time for legislation and reform to stop the freeholders game once and for all.
Most of us are comparing them with other dodgey operators because they are dodgy operators. For heavens sake, look what they instigated. Rip off mainly vunerable first time buyers who dont understand leasehold, greed greed greed. Even abused the taxpayers help to buy scheme
Trevor, can you come up with something that might help those 24 unfortunate buyers now.
Yes, the management that instigated selling thes houses as leasehold should be sacked and stripped of their company pensions. All the property’s that were sold as leasehold should be reverted to freehold at the expense of taylor wimpey, persimmon, woodrow etc, job done
Trevor, Can you come up with something more realistic.
At whatever the cost, Taylor Wimpey should buy back the freeholds that they sold and hand the freeholds over free of charge to the house owners..
If, the current freeholders refuse to sell, Taylor Wimpey should finance the house owners to buy their freeholders under the right to enfranchisement.
MH, 24 unfortunate people, is that how you describe somebody who has probably had their life seriously damaged. 24???, they, tw etc have sold hundreds of leasehold that were only sold leasehold for one reason, and we all know what that is
It seems to me that the only thing Taylor Wimpey regrets is that they have been caught out!
How odd that they appear to claim that they did not appreciate the full implications of the onerous terms of the lease, yet expect the innocent purchaser to understand it?
Perhaps as the developers are publicly quoted companies it would be an idea to buy a few shares in order to attend their AGM’s?
It seems to me that Michael Holland is
Iiving in la la land. Michael, I find your condescending attitude galling. Trevor Bradly is absolutely correct in stating that the management that instigated this racket should be sacked and stripped ofbtheir pensions. How can you not see that? Are you so inbedded in the culture, and sitting comfortably on your Taylor Woodrow pension that that you have your head stuck up your A **e?. It’s very easy to be magnanimous on behalf of others. I am afraid that I strongly disagree with you and I am a freeholder.
Kim. Thanks for the compliments.
If you read all of my comments and suggestions (there are a lot of them) I hope you will realise that I am doing my very best to find a solution that will help the 24 Taylor Woodrow Leaseholders. As an ex Taylor Woodrow employee ( which was a very reputable company) , I am hoping it may have some affect.
As Campaign against retirement leasehold exploitation has already stated the present situation will most likely be solved by shaming the perpetrators and not by abusing them.
If you have any better workable solutions let’s hear them.
So Kim please stop abusing me and try and help those Leaseholders.
Michael Hollands is of considerable help to LKP / Campaign against retirement leasehold exploitation in writing letters to numerous figures in the sector insisting on fair dealing or greater clarity. He also keeps LKP / Campaign against retirement leasehold exploitation informed of a whole range of published information that we simply do not have time to monitor ourselves.
He is broadly right on this: the best option is for Taylor Wimpey to sort these unfair leases with punitive ground rents sold between 2007-2011. This will cost a lot of money, and the shady investment companies who now own the freeholds are not going to make it cheap.
The alternative is litigation through a class action, which is being explored.
Or, the obvious recourse of suing the various solicitors who were recommended by Taylor Wimpey in these transactions.
The government can immediately help by ending the Help To Buy scheme for properties loaded with punitive ground rents, ultimately at the expense of homebuyers and taxpayers who underwrote the purchase.
Anger over this issue is not misplaced.
It is a blatant example of society’s unfairness as the old cheat the young; the affluent cheat the aspiring; and corporations cheat their customers.
(And Britain being Britain, the government helps them do this with haphazard economic micro-management in the form of the Help To Buy scheme.)
Michael, I certainly wasn’t ‘ abusing’ you ?? I was just quite cross at what I perceived as your rather condescending attitude towards Trevor Bradley’s excellent suggestion that the unscrupulous management at Taylor Wimpey should be sacked and stripped of their pensions ( Generous I’m sure!) To be fair, I hadn’t Read any of your other comments or suggestions. Mea Culpa. Compliments on the good you have been carrying out. I apologise for my rude remark.
No problem. We shall see if those concerned MP’s, Campaign against retirement leasehold exploitation and Supporters who comment have any affect.
If that fails then Trevor , yourself and others likeminded, can start a campaign to strip those responsible of their jobs and pensions.
I often wonder if they read what we say about them on here.
Michael, I am sure that LKP/Campaign against retirement leasehold exploitation and supporters will have optimum effect. In the unlikely event that this is not the case,I I shall certainly have my pitchfork at the ready!
I am convinced that the offenders read what we say about them here. It’s rather like arsonists watching their destruction- they can’t help it………????
I shouldn’t have to do any campaigning. It should automatically be enforced by the powers that be who should be putting a stop to all this.
Surely these senior management people won’t be allowed to carry on as normal as though nothing had happened.
After all, if I rob a bank and then get caught, I can’t just give the money back and carry on with my life as normal..
Would these people have instigated these horrendous lease conditions if they knew that if caught out they would actually lose something to seriously ruin their lives.
All this faffing around, and continuous fire fighting, can’t be doing with it anymore – hang em high, and get Martin Paine up in the queue at the same time
One of the things I think we should/could do MH is to get some “flyers” printed off advising all the reasons as to why NOT to buy a Leasehold House.
Together we will then travel round on a weekend basis. say spending 5 hours at each site sales office of various builders selling leasehold, handing the flyers out to would have been possible purchasers.
I don’t mind doing week days as well.
I reckon by the end of February we will have TV coverage. Spread the word vas they say.