10,500 leaseholders to benefit, not just the 5,400 in Taylor Wimpey’s own scheme
The Competition and Markets Authority has today forced Taylor Wimpey to remove its rip-off ten-year doubling ground rent terms – and junk its “ground rent review scheme” which simply continued the ground rents but rising with RPI instead.
“Affected leaseholders’ ground rents will no longer increase and will remain at the amount charged when they first bought their home,” says the CMA.
This demonstrates that Taylor Wimpey’s own efforts to unpick ten-year doubling ground rent contracts were utterly inadequate: it had set aside GBP130 million to address the issue, but could not resist setting the ground rents to rise with RPI.
Worse, the onus was on affected leaseholders contacting Taylor Wimpey to apply for relief.
The CMA says that around 5,400 leaseholders did so, but Taylor Wimpey sold ten-year doubling ground rents to 10,500 buyers.
The CMA announcement raises the suspicion that our plc housebuilders are out of control and cheat their customers, whether over ground rents, cladding or building safety defects. Why on earth do we subsidise them, and so generously, with so little over-sight?
The CMA says that its “Investigation into Barratt Developments is ongoing.”
Andrea Coscelli, Chief Executive of the CMA, said:
“This is a huge step forward for leaseholders with Taylor Wimpey, who will no longer be subject to doubling ground rents. These are totally unwarranted obligations that lead to people being trapped in their homes, struggling to sell or obtain a mortgage. I hope the news they will no longer be bound into these terms will bring them some cheer as we head into Christmas.”
Michael Gove, housing and communities secretary, said:
“Unfair practices, such as doubling ground rents, have no place in our housing market – which is why we asked the CMA to investigate and I welcome their success in holding these major industry players to account.
“This settlement will help to free thousands more leaseholders from unreasonable ground rent increases and other developers with similar arrangements in place should beware, we are coming after you.
“We continue our work to protect and support all leaseholders and our legislation to restrict ground rents in new leases to zero will put a stop to such unfair charges for future homeowners once and for all.”
As part of its review of the leasehold sector, the CMA is continuing to investigate two investment groups, Brigante Properties and Abacus Land and Adriatic Land, after it wrote to the firms earlier this year setting out its concerns and requiring them to remove doubling ground rent terms from their contracts. The CMA’s investigation into Barratt Developments is also continuing.
Taylor Wimpey reports the decision, with no apology naturally:
An update from Taylor Wimpey On Wednesday 22 December 2021, Taylor Wimpey plc announced that the CMA’s investigation into the historical sale of leasehold properties with doubling ground rent clauses by the company is closed, following the agreement of voluntary undertakings.