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:
CMA Leasehold Investigation Closure ‧ Taylor Wimpey
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.
Well done all.
Is this the end of the beginning for Fleecehold?
Remember the Retirement Developments, is where McCarthy & Stone and Peverel Group, now Firstport Retirement part of Firstport Ltd, began this in the 1990s when they were working together.
Different name from Peverel, Firstport Retirement different Directors and CEO but same aim to take your money, because the law allows them to, and the Police say nothing!
Thank you LKP for the platform.
Following on from those mentioned The Private Estates Built by Barrett Homes/David Willson Homes and one in particular:
Chamberlayne Walk Estate in North Brent where Labour MP Barry Gardener has been Thwarted yet again by Nigel Howell, CEO of Firstport Ltd trading as Firstport Property Services Ltd.
It seems writing to Nigel Howell and expecting a response the same year is a rarety, if he does respond it surrounds the truth with fake stories and second-hand information provided by Property and Regional Managers who had been tasked to explain the past 20 years of continued ERRORS & MISTAKES that cost 98 FREEHOLDERS and 104 LEASHOLDERS I believe as high as c.£2,400 when the 8% compounding interest is added.
What makes it strange is Nigel Howell has already sanctioned the refunds of c.£1,000 each to some of the Freeholders but none to the Leaseholders who have also been Scammed.
It had been stated I believe by Mr Luke Couper on behalf of Nigel Howell they will not release any of the money owed unless each Freeholder puts forward a claim.
Mr Couper then stated he will hold on to all the money owed until claims are made, even though Firstport has been made aware of all Scams that had been unearthed by both Freeholders and Leaseholders since 2016.
To dirty waters, further Firstport has removed the third Property Manager in 4 years and have now decided to no longer communicate until they appear at the Small Claims Court for Freeholders and FTT for Leaseholders.
Now after 4 years the depth of the Scams has been uncovered and new ones are being discovered and added to the total amount expected.
This has been seen on other New Estates when the roads are not completed and substandard, requiring very expensive maintenance.
Of course, the drainage can also be substandard, on one development the underground car drainage which flooded every year for a substantial period was later found not to have been connected to the main drainage storm system.
Freeholders who purchased houses on Estates pay:-
* Estate Management Fees.
* Council Tax
* Estate Management Fees
* Service Charges
* Council Tax
The Developers are top of the tree in the conspiracies to provide Revenue Streams for all involved.
Services Charge Exploitation was noted in 1990 in McCarthy & Stone Developments where Managing Agents Peverel (now Firstport) was accused of being too close to the company and in 1993 there was a Management Buyout and Peverel went solo but kept all the existing Management Contracts.
Service Charges have been criticised on many developments since the 1990s for:-
* Excessive costs
* Lack of transparency
* Lack of Accountability
* Difficulty in providing refunds
* Poor management
* Lack of leadership
Local Councils used to Adopted the areas but as funds from Central Government were squeezed the Councils looked to reduce the potential workload and the Private Estate Manager became the norm.
The Estate Fees charged have been found to include:-
* Pockets of land not transferred
* Items included not in transfer
* Fire equipment charges
* Pest control charges
* Non-existent bin charges
* Trees shrubs not replaced
* Duplication of costs
* Account preparation fees
* Monitoring fees
* Many Other hidden fees
This is what is happening at Chamberlayne Walk Estate in North Brent where the local Council has not Adopted the Communal Areas and Firstport Property Services ltd are the Managing Agents.
Attempts to find out the happenings at Chamberlayne Walk have been thwarted by the Council, Barratt, and Firstport, I Wonder Why.
Will this be extended to all doubling clauses do you think?.
My ground rent doubles every 25 years and the freehold sold off to Adriatic land shortly after purchase in 2016.
Angry North West Leaseholders
Angry NorthWest Leaseholders.
So the fact is that doubling GRents have been shown to be a way for the unscrupulous to extort money from ordinary working people, and leasehold tenure has been stopped for new builds, and in the same vein many other facets of the leasehold scam are hopefully going to be outlawed soon.
Now this is only because the CMA & Government….and not only that but a Conservative Government have determined that this leasehold system is unfair…even our illustrious Prime Minister has said so, it has also caused many problems for Government and therefore I do think it is high time that the tables were turned and that leaseholders and Government alike should seek compensation from these scoundrels.
I do not think compensation should be charged to the workings of Companies who will pass on the bill to the next house purchase price, but to be fair should come from those who controlled profit from rents and permissions, ie, the CEO’s of development companies and freehold management companies, and just as is the case of a leaseholder having his home forfeited so if the funds of these persons cannot provide enough for payment then they too should have their properties forfeited.
You might think this is not ever going to come about, but I remember only a few years ago that we were told by quite a number of government ministers and developer companies that …to quote…. ‘There is nothing wrong with leasehold we can controll ourselves’ but now see how things have changed! they didn’t think these changes would come about either! further, I will say that the ball has only just started to roll and the people who have suffered long enough will keep on rolling it until this unfair money for nothing scheme, only seen in this country is totaly abolished.
If a requirement is set out in a lease that you pay £250 per annum that is clearly a financial burden in the property and the larger it becomes the more it will impact on the premium the purchaser is to pay for the lease
Therefore it is part of the overall consideration the grantor of the lease seeks for disposing of the property – it is indeed for no service and should detract from the price compared to one with no ground rent
What is wrong is the impact of that ground rent stream is not appreciated or any help given to work it out – this could be easily achieved so that when a buyer buys a leasehold property they should be advised what it would cost to reduce the rent to nil so they can factor it into their offer. Then once having bought it they would have no rights to claim that it was all too complicated, unfair or written in legal speak
The builder stated that the cost to reduce the rent to null was £2,000 and never increase.
After the property was purchased it became £10,000 without any warning.
Angry NorthWest Leasholders.
Angry North West Leaseholders.
I do appreciate that you have a great knowledge of leasehold and I think it would be incorrect to say you agree with leasehold as a tenure scheme, however your diagnosis does suggest that we carry on with leasehold since it may in theory have some good points … in theory, and if a lease was taken on as a means of securing a property with a lower premium as a long term loan, I could agree that there would be a benefit to the purchaser,
What we have in practice is a system whereby the loan in the terms of the lease is subject to clauses set up in an arbitrary way and with little regulation, or as you say “no help given to work it out”, and I am sure that if it were a case of paying back a loan just as in the case of a bank loan, then all involved would understand it and the repurcussions if payment is witheld for some reason.
But leasehold is a scheme whereby the person who has actualy paid a mortgage over a substantial number of years has his ownership of the property taken from him when the lease is agreed to, and the various schemes that have been set up by freeholders to extract money are too numerous to mention.
Indeed the whole area is a minefield of rules and regulations legal or otherwise, is it any wonder why prospective purchasers say they don’t understand what it is they have let themselfs into?
In my particular case, I purchased my house in the mid 1980’s, leasehold in the North West was a normal thing, not many understood it and if you really wanted to find out you had to have a good chat with a solicitor…at a price. I would say that a good 70% of housing was leasehold and the ground rents were quite small amounts, things changed in the next 10 or so years and this would be the time that developers and their ilk saw the potential for using leasehold housing for excessive investment schemes, all was set up in the legal system ready and waiting for the fantastic opportunities of exploitation of leaseholders which has gone on since, and in a limited way was the situation previously.
In conclusion, yes, leasehold could be of benefit to prospective house purchasers but the greed of inhuman monolithic investment companies along with leaseholds potential for being used by unscrupulous freeholder managing companies has shown it to be one of the most corrupt areas for companies who have the ironic and unreserved cheek to say they are a ‘business’ wheras in fact the whole leasehold system is legalised blackmail.
As said, this is a huge step forward for leaseholders. thanks to the brave and diligent efforts of LKP, Sebastian O`kelly in particular, all the LKP team, the involvement of Sir Peter Bottomley and more recently Micheal Gove, who will hopefully also tackle other less publicised abuses in the housing sector.
Angry NorthWest Leaseholders.
Angry NorthWest Leaseholders.
Tony Turner… Hear Hear! absolutely true, Sebastian and Martin of LKP, Sir Peter.. and hopefully Michael Gove, and not forgetting Katie Kendrick and her team of the National Leasehold Campaign along with many others such as Harry Scoffin who have felt compelled to do something about the injustices of leasehold.
I recently read a post on Twitter where a victim of leasehold said ‘who manages the freehold companies? ‘ … it was obvious to me… its THE DEVIL !!
Tony, thank you for mentioning those who have shown the metal needed to uncover the Leasehold Exploitation including the Freeholders who now are caught up in the Fleasehold introduced by the largest Developers who now are under pressure to Right the Wrongs they believed they could get away with.
Then there are those who have been champions in the Cladding Scandals and those who have challenged the requirements of Waking Watch.
The latest exploitation that is been uncovered are the same Organisations that are Connected in the Management of Private Estates where when problems are uncovered such as the Chamberlayne Walk Estate built in 2000 by Barratt Homes and the Management is contracted to the very same companies that are involved in Exploitation of Retired Leaseholders and have fingers in so many pies, they have become very rich on the backs of Residents in both Sectors.
To finish, may I wish all those Davids who have shown Gumption to take on these Giants, a Happy and Prosperous New Year, with more stones thrown.
N. Wales leaseholder
I have never heard of the term ‘sinecure’ before someone on twitter mentioned it in relation to leasehold exploitation.
The Wikepedia explanation of the term sounds just right.
A sinecure is an office, carrying a salary or otherwise generating income, that requires or involves little or no responsibility, labour, or active service.
Sinecure is an office, carrying a salary or otherwise generating income, that requires or involves little or no responsibility, labour, or active service this could have been written for Firstport Ltd as they now are trying to us the Human Rights Act to stop Residents preventing them from Ripping us off.
Paul Wilson form Facebook Posted
The counter-argument to human rights is somewhat more compelling.
The Freeholders quite literally have a vested interest in their investment generating revenue as any business does.
Using human rights as their defense for reform being passed is the very thing they are exploiting.
Leaseholder properties are more scandalous than the credit crunch mortgage crisis. There are people trapped by Freeholders getting kickbacks from rogue management companies making astronomical sums of money from Service Charges.
The Human Rights argument stops when you realise one can simply get another revenue stream or another job but a leaseholder is trapped and exploited in the very system they claim they have Human Rights in?
The body of evidence is overwhelming and there needs to be a large-scale group litigation effort to really bolster the claim. It’s being laughed at currently. It’s truly tragic the human cost these parasites are willing to pretend does not exist.
Is this what you get from 40 years of deregulation. While good citizens are bound by ever more oppressive laws, “the market”, according to neoliberal theory, should be released from regulatory constraint.
Deregulation is a euphemism for destroying the effective capacity of the state to protect us from chancers, conmen, and criminals. Empowered to cut corners, fishy businesses outcompete responsible ones and we begin to shift towards an organised crime economy.
As crime syndicates extend their reach and expand their wealth, they become politically powerful.
Eventually, Mafias become embedded in public life.
This is what happened in the US during prohibition. You can see it at work today in Russia, Italy, Mexico, and Lebanon.
What is the obvious mechanism to prevent it from happening here?
“The 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.”
Michael Gove, Housing and Communities Secretary
As we enter the New Year let us trust existing leaseholders will benefit through early legislation to make it easier and cheaper to extend their leases and/or adopt Commonhold, with Ground Rent reduced to zero,
And all those with “similar arrangements in place” (informal lease extensions) should now beware.
Alec, we have started the mass reporting of Managing Agents that use Leasehold Exploitation to make themselves richer, check out Facebook and About Firstpoprt Websites.