Caught in a trap! Taylor Wimpey “sorry” for ripping off leaseholders!
Some mistakes are hard to fix. It is better to be careful – not sorry!
Taylor Wimpey used a trading statement last week to announce their ‘conclusions’ following a review into the company’s historic lease structures. This focused solely on a specific lease structure used from 2007 to late 2011, which provides that the ground rent doubles every 10 years until the 50th year. In doing so, the company created a new asset class that is now very attractive to specialist investors, because it equates to an annual interest rate of 7%. Taylor Wimpey claimed these leases “are considered to be entirely legal.” It remains to be seen whether the charges would be deemed by a court to be ‘fair and reasonable’ Under the Unfair Terms in Consumer Contracts Regulations 1999.
Taylor Wimpey now admit that: “the introduction of these doubling clauses was not consistent with our high standards of customer service and we are sorry for the unintended financial consequence and concern that they are causing.” Surprisingly, Taylor Wimpey says the total cash outflow of around £130million “will be spread over a number of years.” In addition, this only applies to the “qualifying customers subject to eligibility checks” – only those owners who bought from Taylor Wimpey are to be “helped.”
Ground Rent Review
Taylor Wimpey has written to buyers who have complained about their leases with the onerous ground rent doubling clause. In the letter Taylor Wimpey outline its “Ground Rent Review Assistance Scheme” funded by the company, which offers to negotiate on the customers’ behalf with freehold owners for a ‘Deed of Variation’ to “convert existing doubling leases to an alternative lease structure incorporating materially less expensive ground rent review terms.” with Taylor Wimpey covering the financial cost of doing so”.
Welcome to ‘rabbit hutch’ Britain as Government gives the green ight to even smaller micro homes
“Ridiculous” – “immoral” – “dog kennels” – “shoe boxes” – “rabbit hutches” These are just some of the words local residents have used to describe Britain’s micro homes – Government-endorsed “favelas in the sky.”
It would appear the Government is intent on cramming an ever increasing number of ‘hard working British people’ into ever smaller areas and living spaces. Evidence of this provided by the Housing White Paper, with its proposal to review the guidance on minimum sizes for new homes, despite the “nationally described space standard” only being in force since October 2015.
“The Government proposes to amend the National Planning Policy Framework to make it clear that plans and individual development proposals should:
- make efficient use of land and avoid building homes at low densities where there is a shortage of land for meeting identified housing requirements;
- address the particular scope for higher-density housing in urban locations”
We also want to make sure the standards do not rule out new approaches to meeting demand, building on the high quality compact living model of developers such as Pocket Homes ”
New homebuyers are short-changed as the latest revision to housebuilders’ ‘non-mandatory’ Consumer Code is published.
A year ago, I wrote an article that I showed the Consumer Code for Home Builders (CCHB) is failing new homebuyers. The all-party parliamentary group (APPG) Inquiry Into the quality of new homes concluded in its Report that:
- “The evidence points to an industry…..which will at times ride rough-shod over dissatisfied buyers”
- “the Code [Consumer Code for Home Builders] does not appear to give homebuyers the safeguards we think they should expect”
- “it does not appear to us objectively to offer consumers a wholly satisfactory form of redress”
- “The Consumer Code for Homebuilders is limited in its scope”
Well it’s about to get a whole lot worse!
In September 2015, the CCHB announced a triennial review of Code, at that time changes were expected to come into effect in 2016 – “to ensure it continues to evolve with the industry and changing consumer needs and as a result of adjudication cases.” It claims “The industry has now made great strides in producing an updated Consumer Code which is fit for purpose in today’s world” Talk about hype!Changing consumer needs? Fit for purpose?
Last week the CCHB published the 4th incarnation of their consumer code, which I believe now contains specific revisions which severely diminish the likelihood of a successful claim by new homebuyers seeking redress and justice from errant housebuilders. The changes, place additional restrictions that can best be described as obstructive, the sole purpose of which is to protect the industry from the very few homebuyers that go through the rigmarole of Code’s dispute adjudication process.