Developers like Taylor Wimpey and ground rent investors such as Long Harbour (Adriatic Land, Abacus Land, HomeGround) appear before the Select Committee today.
Taylor Wimpey is fielding a relatively junior employee, with courageous CEO Pete Redfern staying well clear.
Here are a couple of questions:
Taylor Wimpey Ground Rent Review Scheme has £130 million set aside. Yet has paid out £11.3 million as of August 2018. Why?
a/ Why is Taylor Wimpey not contacting former customers: they have to contact the company.
b/ Why won’t it say how many doubling ground rent leases it sold?
c/ Where are these sites?
2/ Taylor Wimpey has told the Select Committee in writing that doubling ground rent properties were “commenced” and, later, “sold” between 2009 and 2011: in fact, there were sales long after that date with some sales as late as 2015.
And here are some thoughts on Long Harbour, a £1.4 billion ground rent fund founded by William Waldorf Astor.
It claims its investors are UK pension fund investors in residential freeholds
Why are some companies owning ground rents in the fund based offshore? Why are all companies owning an investment in ordinary families’ homes hiding beneficial ownership behind nominee directors?
These are invariably employees of the Sanne Group, based in Jersey and London.
Long Harbour references Heysmoor Heights in Liverpool, a private site with Grenfell cladding, as an example of responsible landlordism.
It did, indeed, make a forced loan to leaseholders to pay for fire marshals. This was the means by which it protected the building and satisfied its responsibility to make the building safe.
However, it also obtained a tribunal ruling saying leaseholders must pay to remove cladding.
This will wipe some families out: maximum value of Heysmoor Heights flats is £100,000.
The landlord here is Abacus Land 4 Limited, based in Guernsey. if these families cannot afford to pay Grenfell bills they will have their flats forfeited by a company hiding its beneficial ownership in a tax haven.
Long Harbour repeatedly stresses that its ground rent fund owners are UK pension funds.
We question this: we believe there is significant private equity in the fund.
Why is Long Harbour so secretive?
Long Harbour thinks a minimum £200pa ground rent is fair.
“… if the government legislated that all future ground rents for leaseholds in apartment buildings be capped at 0.1% (of the original sale price), with a floor of £200, rising periodically in line with RPI, this would enshrine a culture of responsible management and enable freeholders to perform a valuable function”.
Others appearing today are:
Jason Honeyman, Chief Executive, Bellway
David Jenkinson, Group Managing Director and Main Board Director, Persimmon
Jennie Daly, Group Operations Director, Taylor Wimpey
Richard Silva, Executive Director, Long Harbour
Mick Platt, Wallace Partnership Group Ltd
John Dyer, Director, Savills, and Chair of Residential Management Committee, British Property Federation
Nigel Glen, Chief Executive Officer, Association of Residential Managing Agents
Related posts:
Taylor Wimpey to pay £130 million to solve doubling ground rent scandal
Countryside Properties plc deal to buy back freeholds turns spotlight on Taylor Wimpey, BBC told
I had to spend £14,000 to change double ground rent to RPI at Ausden Place. But will I get compo from Taylor Wimpey?
Taylor Wimpey and Long Harbour deal to defuse toxic lease scandal … after 11 months!
Kate Osamor MP asks parliamentary questions for Long Harbour on ground rents, says Daily Telegraph
“Severe dissatisfaction” with the leasehold crisis says Liverpool Council
Was there not a case of a Taylor Wimpey purchaser having his deposit refunded in 2007 after discovering the onerous doubling ground rent clause?
Michael in 2016 LKP posted as you quoted.
One Taylor Wimpey buyer pulled out of buying a London flat after finding out that the ground rent would be doubling in September 2007. Irvin Tarn reserved a flat for £2,000 in a new development in Mill Hill, north London, but pulled out after learning that the £300 ground rent would double five times to reach £9,600 by 2057.
Mr Tarn told the Evening Standard’s Home and Property section: “I have since spoken to several solicitors who confirmed that, like me, they had never heard of this, and described it as outrageous. The estate agents involved claimed to know nothing of it, either.”
Mr Tarn then made a point that has been repeated by LKP nine years later: “I think that first-time buyers have enough of a struggle to get on the housing ladder without national companies trying to make an extra profit by burying clauses like these in their long leases.”
Taylor Wimpey acknowledge that 10 year “doublers”are onerous.
Can I ask Taylor Wimpey if they know of a single case in which a panel recommended solicitor has advised a purchaser of the onerous terms of the lease?
Longharbour say they are “long term custodians” of complex developments,
Is it not the case that they outsource their responsibilities to firms such as Estates & Management (accounts listed by Companies House as overdue)?
That being the case why would it not be possible for commonholders to equally outsource their obligations to expert firms who would ensure that commonhold responsibilities were met?
Having watched the Select Committee in action I wondered why only Taylor Wimpey, Bellway and Persimmon’s were in attendance? Do they intend to call others such as:-
McCarthy & Stone,
Barratt Development,
Berkeley Group
Redfern Ltd
Appearing in Session one were:-
*Bellway – Jason Honeyman, Chief Executive
*Persimmons – David Jenkinson, Group Managing Director and Main Board Director
*Taylor Wimpey – Jennie Daly, Group Operations Director
Appearing in Session Two were:-
Long Harbour – Richard Silva – Executive Director
Wallace Partnership – Mick Platt
Savills – Chair Residential Management Committee, BPF – John Dyer – Director
Association of Residential Managing Agents (ARMA) – Nigel Glen – Chief Executive Officer,
Taylor Wimpey (TW) CEO was absent instead sending in a Junior Group Operating Director who was apologetic for the onerous Ground Rents, that we are now aware go back to 2007 (as above) and not the 2009/2011 as stated.
Taylor Wimpey Ground Rent Review Scheme has £130 million set aside, has now paid out more than the £11.3 million as stated in August 2018. TW admitted it was wrong to undertake doubling Ground rents and were attempting to square the circle but I believe they will not be contacting former Leasehold Customers.
The stating by Long Harbour that they use the Ground Rent Charges to invest in UK Pension Funds is I might say a Red Herring? When the Offshore based companies are mentioned it begins to make one think, why are companies owning an investment in family homes hiding beneficial ownership behind nominee directors and Shell Companies?
A FTT ruling saying leaseholders must pay to remove cladding is I believe unfair and should be contested by all leaseholders on a Pro Bono case which other leaseholders could take similar action.
Long Harbour repeatedly stresses that its ground rent fund owners are UK pension funds, how can this be checked as it is believed there is significant private equity also in the fund, Long Harbour is not providing much information.
I first purchased a Leasehold House built circa 1939, in 1983 for £35,000 and the Ground rent was £35.00 per year, the Freehold cost me 10 times the Ground Rent being £350.00 so there had been a formulae in use in the 1980s.
If the government legislated that all future ground rents for leaseholds in apartment buildings be capped at 0.1% (of the original sale price), with a floor of £200, rising periodically in line with RPI, this would enshrine a culture of responsible management and enable freeholders to perform a valuable function, what utter tosh” check out what was said about RPI as this is considered worse than doubling Ground Rents.