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You are here: Home / Latest News / Barclays refuses mortgages over lease terms at Taylor Wimpey’s prime Chobham Manor

Barclays refuses mortgages over lease terms at Taylor Wimpey’s prime Chobham Manor

August 28, 2018 //  by Sebastian O'Kelly

Barclays Bank is refusing to issue loans to purchasers at Taylor Wimpey’s Chobham Manor development in the Queen Elizabeth Olympic Park in Stratford, east London, where homes fetch up to £1m.

The Financial Times reports today that a subsidiary company, jointly owned by Taylor Wimpey and L&Q housing association, holds the head lease to the development. The London Legacy Development Corp holds the freehold.

Barclays has refused to issue a mortgage against an apartment in the first phase of the development because of an unusual clause written into the head lease. This allows an administrator to “disclaim” the lease if the Taylor Wimpey and L&Q subsidiary became insolvent.

A spokesperson for Barclays said that, if the head lease stopped existing, any underleases granted out of it would also be terminated. This would be “particularly problematic” if the bank was taking security against underlease.

“Barclays does not assess the solvency of the head tenants when we lend against an underlease, and we have no control or oversight over the head tenant’s solvency throughout the term of our loan,” the spokesperson added.

Here we go again … Taylor Wimpey again infuriates banks with its obsession with being clever over the lease terms that it seeks to impose on customers. This time Barclays Bank has publicly rebuked it

After being questioned by the Financial Times, Taylor Wimpey said it would look to amend leases for all current residents of the development to fix the issue. It would not disclose how many homes were affected.

The FT says: “The incident raises questions about the increasingly complicated leasehold structures being used by some top housebuilders, which are leaving lenders nervous about the potential future value of their security.”

Last year, Taylor Wimpey set aside £130m to settle disputes over ground rents, having introduced doubling ground rent clauses into both leasehold houses and flats.

The company undertook to cease selling houses as leasehold tenure from January last year, after the Leasehold Knowledge Partnership raised the issue with with MPs and media.

Of the £130 million, only £11.2 million has been paid out.

Taylor Wimpey has paid out only £11.2m of the supposed £130m to sort the doubling ground rent scam

Chobham Manor bills itself as the first of five “neighbourhoods” to be built at the Olympic park. More than 6,800 homes are set to be built over the next two decades.

A subsidiary company, jointly owned by Taylor Wimpey and L&Q housing association, holds the head lease to the development. The London Legacy Development Corp holds the freehold.

Related posts:

‘Fright night’ for Taylor Wimpey as profits fall 24% over leasehold scandal, says Times Barclays turns down mortgage on flat where ground rent doubles every 25 years Taylor Wimpey and Long Harbour deal to defuse toxic lease scandal … after 11 months! Taylor Wimpey woes reported in Estates Gazette Taylor Wimpey ground rent explanation ‘not true’, BBC is told

Category: Latest News, News, PressTag: Barclays, Chobham Manor, Financial Times, Taylor Wimpey

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Reader Interactions

Comments

  1. Stephen

    August 29, 2018 at 9:04 pm

    This risk can be insured against

    https://www.lawsureinsurance.co.uk/our-products/title-protection/forfeiture-lease/

    Premiums are usually in the low hundreds

    • Ian Martin

      August 30, 2018 at 9:35 am

      What happens if the insurer goes bust, simply refuses to pay up, or wriggles out on a small print technicality ? Insurer taking on such a high risk for a few hundred pounds premium doesn’t sound right. I doubt any insurer would cover this scenario anyway. Also doubt Barclays would feel comfortable lending even with such an indemnity policy in place.

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