This morning Pete Redfern, Taylor Wimpey CEO, was on the Today programme (BBC Radio 4) discussing the housing crisis.
This afternoon MPs are demanding he explain a housing crisis of Taylor Wimpey’s own making: building leasehold houses and flats where ground rents double every ten years.
This has left first-time buyers with homes that they cannot sell, or which have plummeted in value. Potential buyers have been refused mortgages, it is claimed.
In one estate of Taylor Wimpey houses in Heywood, Greater Manchester, ground rents rise from £295pa to £9,360pa.
The houses will have some value in the auctions, but none have sold for anything like what the purchasers paid Taylor Wimpey in 2012.
Sir Peter Bottomley MP, joint-chairman of the All Party Parliamentary Group on leasehold reform that meets this afternoon, has called on Mr Redfern to explain this company’s policy.
“Is there any reason to sell a new house leasehold except to put the new owner at a disadvantage?” the veteran MP asks.
“This may have been legal; it is clearly undesirable. I think of it as sharp practice.
“A respectable company, I believe, should rule out this arrangement as corporate irresponsibility.”
“Let us have a public debate, where Taylor Wimpey can apologise for their prejudicial arrangements. Or, can there be an acceptable defence?”
Many of the first-time buyers also bought these toxic assets with taxpayers’ assistance through the Helpt To Buy scheme.
A vote at last week’s of 550 delegates at the annual conference of the Association of Residential Managing Agents found members were “worried” that housebuilders were taking advantage of new buyers with exploitative lease terms.
In other words, leasehold professionals regard Taylor Wimpey’s conduct as beyond the pale.
In addition to LKP, the scandal has been reported by The Guardian newspaper, and it will shortly feature in a TV documentary.
There is no clearer example of a housebuilder building homes with an investment asset class built in, which could subsequently be sold off to ground rent investors, many of which are based offshore.
On the Today programme this morning Mr Redfern, whose pay is around £2 million a year, issued his report into housing.
He was asked by the Labour party to lead the study. He rejects help-to-buy schemes as inflationary, and says they should be restricted to first-time buyers seeking lower-priced homes.
He also calls for more rented property (as leasehold is just a long rental Taylor Wimpey is doing its bit here), and end the fixation with private homes.
“A fair housing market also needs both a healthy private rented sector and a supportive social housing sector,” says the report.
Home ownership fell 6.2 percentage points between 2002 and 2014 because fewer young people could afford to buy. House prices rose rapidly before the banking crisis; then credit constraints kicked in; and a constant driver was the decline in incomes of those aged 28 to 40 relative to older people.
Mr Redfern urges the setting up an independent housing commission, modelled on the new Infrastructure Commission, to provide long-term thinking on housing.
Mr Redfern was asked to carry out his report by Labour shadow housing minister John Healey, with former Monetary Policy Committee member Kate Barker and Andy Gray, former managing director of mortgages at Barclays.
Ms Barker carried out the report on housing affordability under the Brown government.