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You are here: Home / News / Parliament / APPG December 14 2016 / 70 attend APPG on leasehold after ground rent scandal grabs media attention

70 attend APPG on leasehold after ground rent scandal grabs media attention

December 16, 2016 //  by Sebastian O'Kelly

… and Taylor Wimpey backs down on building more leasehold houses

The APPG on December 14 was addressed by Patrick Collinson, Money Editor of the Guardian, Bob Bessell, retirement house builder, Sir Peter Bottomley MP, Jim Fitzpatrick MP, Martin Boyd, of LKP, Philip Rainey QC, and Peter Wells, of the Open Data Institute

More than 70 stakeholders, MPs and peers attended last night’s meeting of the All Party Parliamentary Group on leasehold reform.

The meeting, chaired by Jim Fitzpatrick (Labour, Poplar and Limehouse), was called at short notice following the upsurge of anger at Taylor Wimpey.

The plc housebuilder introduced doubling ground rents into its sales of leasehold houses and flats between 2007 and 2011.

Many former customers claim that the properties are either plummeting in value or are unsellable as mortgage lenders will not lend on these assets.

Taylor Wimpey has now ceased the practice but denies that the properties are unsellable.

In a statement to the APPG chairmen MPs Sir Peter Bottomley and Jim Fitzpatrick, the company said:

“We have also examined trends on sites where these leases were used, and observed that has continued to be normal patterns of sales, mortgages and remortgages over the last 10 years and to date, plus some instances of customers purchasing the freehold. We do not believe that there is evidence of a widespread issue of saleability or mortgageability, although of course the lender will always take into account lease payments in the affordability criteria on a case by case basis.”

The ground rent scandal has been extensively covered on the Leasehold Knowledge Partnership website and in the Guardian newspaper, which has made the issue a campaign.

Some articles on the Guardian website have received more than 900 comments from readers.

Justin Madders, Labour MP for Ellesmere Port and Neston, has been championing constituents who own leasehold houses with onerous ground rents. He wants answers, and will be raising issues in the Commons leasehold debate next week

Justin Madders, Labour MP for Ellesmere Port and Neston, has called for doubling ground rents to be banned.

He attended the APPG with a number of his colleagues, including Ruth Cadbury, Labour MP for Brentwood and Isleworth, who will speak in the three-hour debate on leasehold on Monday.

The controversy has shaken Taylor Wimpey, which is carrying out a review into ground rent terms that will conclude in the New Year.

Taylor Wimpey declined to attend the APPG, but at least responded.

The following housebuilders were invited but declined to make any reply: Jeffrey Fairburn, CEO of Persimmon plc; Steve Morgan, founder of Redrow; and Ted Ayres, CEO of Bellway homes, who has yet to make any response to former customers of leasehold properties in spite of numerous efforts.

Ruth Cadbury, Labour MP for Brentford and Isleworth, is in the shadow housing team and is taking a close interest in leasehold issues. She is leading for Labour at the Commons debate on leasehold next week

The only CEO who attend was David Thomas, of Barratt Developments, who explained his group’s policy on ground rents.

The housebuilders did, however, lobby the government on the day before the APPG in a private meeting with civil servants at the Department of Communities and Local Government.

Along with onerous ground rents another heated controversy is the question why houses are being built leasehold rather than freehold.

Taylor Wimpey in its statement to the APPG chairmen said that it had only built leasehold houses in the North West and sites in Yorkshire where leasehold houses have historically been sold, or on sites where it does not actually own the freehold.

“However, whilst we believe that the practice is normal and reasonable, standing back, we are able to change our practice so that we will make future sales of houses on a freehold basis on any new sites that we develop, except in a very small number of cases where Taylor Wimpey does not and the overall development site on a freehold basis. Whilst we expect that this may mean a small increase in sales prices on previously leasehold sites, it will enable us to offer a consistent, simple product to all customers.

“We will be making this change from the beginning of 2017.”

The issue will doubtless be discussed further in the Commons on Tuesday.

Related posts:

Guardian reports the Taylor Wimpey £130m offer to settle ground rent scandal Pete Redfern: Stop pontificating about the housing crisis and sort out the ground rent scandal of Taylor Wimpey’s own making ITV News covers the leasehold house scandal, and homeowners stage mass demo on March 18 Guardian sticks with new-build ground rent scandal, while LKP advises Persimmon home buyers to walk away ‘New-build ground rent scandal could spark legal battles,’ says Guardian

Category: APPG, APPG December 14 2016, Jim Fitzpatrick MP, Justin Madders MP, MPs' APPG on leasehold, Parliament, Persimmon, Sir Peter Bottomley, Taylor WimpeyTag: APPG, Barratt, Bob Bessell, David Thomas, Jim Fitzpatrick MP, Justin Madders MP, Patrick Collinson, Ruth Cadbury MP, Sir Peter Bottomley, Taylor Wimpey, The Guardian

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Reader Interactions

Comments

  1. Karen Knowles

    December 16, 2016 at 7:16 pm

    Perhaps Taylor Wimpey will buy my house back from me then, if there isn’t a problem.? I’m confident that they’d find it is a very big problem!!!

    • linda barnes

      December 17, 2016 at 2:27 pm

      Yes that would suit me also – buy my house back too – they refuse to believe these houses are unsaleable !!! I have proof of this – I have my house up for sale 15-20% under market value and all sales / offers have been withdrawn due to the ground rent, even with the house being up for a ridulas low figure – explain this then Taylor wimpey

  2. Kim

    December 17, 2016 at 2:47 pm

    Let’s hope at least 70 MPs attend the commons debate on leasehold 20th December 2016. I have emailed Karen Buck who is my MP and urged her to attend!!

    • linda barnes

      December 17, 2016 at 3:51 pm

      I will email my mp also – but probably it will be to short notice now , have you tried and failed to sell yours also ?

      • Kim

        December 17, 2016 at 11:57 pm

        No Linda, I am fortunate enough not to have had any dealing with TW. However, I am incensed at their conduct and want to assist leaseholders affected in any way I can.

    • linda barnes

      December 17, 2016 at 4:16 pm

      FYI – my MP is Liz Mcinnes – this is affecting so many people all over the country , Just out of curiosity how did you discover this was such a big issue on your property . Have you looked into buying your leasehold yet , if not you are in for a shock, figures circa 35k for mine!!! I am unsure but I believe not many people know of the problem yet on my housing development and I am unsure how to approach them with this dreadul info, but I suppose the more people that know the better

      • Leaseholder

        December 17, 2016 at 8:55 pm

        Contact your MP and ask her what is being done to safeguard the interests of leaseholders.
        There is a housing crisis for heavens sake, are they trying to to make it worse? Ask her if she is joining the all party group. (See here: https://www.leaseholdknowledge.com/appg-members-list ) it is very likely that other people in your housing development don’t know about it and when they find out they will not necessarily thank you for the bad news. People’s homes is usually their biggest asset and the first reaction is disbelief, followed by fear. However If you all write to your MP together all the more impact. Don’t wait till you want to sell before you do something about it.

  3. Michael Hollands

    December 17, 2016 at 11:32 pm

    Let’s look at the Taylor Wimpey situation objectively.
    Like several other house builders they have been selling new houses leasehold with ground rent increases based on the RPI.
    Between 2007 and 2011 the ground rent increased to doubling every 10 years.
    This applied to both houses and flats and in many cases has made them impossible to sell.
    Taylor Wimpey stopped this practise in 2011., but continued to sell leasehold with increases based on RPI.
    Taylor Wimpey have agreed to stop selling any leasehold houses from the end of this year.
    So they have made a start but there is much more for them to do.
    Although they deny it there appears to be many of their customers who cannot sell due to the acrimonious leasehold conditions between 2007 and 2011.
    All those who are suffering this, should make themselves known to Taylor Wimpey and preferably report it on this website.
    In my opinion Taylor Wimpey then have two choices.
    1 To buy back these properties at a fair price and resell them. This should not be too difficult for them as they themselves deny there is any difficulty in selling.
    2 Compensate the unfortunate customers that will enable them to purchase the freehold. A figure of £35000 has been quoted.by one leaseholder. Taylor Wimpey should have enough clout, with those to whom they sold the leases, to get this cost reduced.
    Of course the situation can be further complicated in that many of these properties have already been sold on by the first purchaser, and it is the second purchaser who will suffer.
    And there are all the properties sold by many companies with ground rent increases based on RPI.
    This was completely unsatisfactory, but they are probably too numerous to deal with in the above manner.
    Has anyone else got any constructive solutions?

    • Kim

      December 18, 2016 at 8:39 am

      Michael I agree with your 2nd point ‘Compensate leaseholders’ etc. However, I further add that TW should ensure that compensation will fully cover the purchase of the cost of

      whether it be 35.000/50,000. Or other. If they get the cost of freehold purchase reduced then bully for them and if they don’t – TOUGH! I suppose it depends which spivs they sold it to.

      • Michael Hollands

        December 18, 2016 at 10:51 am

        On the example given by TW they sold the freehold to the “spins” (as you call them) for around £7000 a property..
        Surely with their clout and persuasion TW should be able to negotiate a price of £10000 and buy them back for those suffering customers.
        The £35000 quoted by the “spivs” is extortion.
        The lower the cost of recouping these freeholds, the more likely it is that all these customers will be assisted.

        • Kim

          December 18, 2016 at 2:50 pm

          yes indeed Michael. ‘Extortion’ which is precisely why I called them ‘ Spivs’ and not ladies and gents with integrity! Let’s see what happens.

  4. Sonia McColl OBE

    December 20, 2016 at 1:26 pm

    Let us not forget park home owners who pay ground rent and 10% of the sale price when there homes are sold. Many report feeling trapped in their homes because after giving the site owner 10% of their equity they can only purchase something of inferior quality. If going into care this curtails the amount and quality of care they can afford. Currently the park home owners justice campaign across three nations are campaigning for an independent review of this communication is ion charge.

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