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