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Weak Mortar In Taylor Wimpey New Homes

The great weak mix mortar scandal – Part Three

My first article highlighted the weak mortar scandal and the reasons why the industry has now widely adopted factory manufactured ‘just add water’ mortar, along with technical reasons which might explain why incidence of weak mortar in new homes is increasing. My second article I followed up on “Britain’s crumbling new homes” on the BBC2 Victoria Derbyshire programme on 6 December 2018.

So in this part three article, I will expand on last week’s BBC Victoria Derbyshire story featuring 130 homes built using an incorrect M2.5 weak mix mortar on the Taylor Wimpey ‘Kingsmeadow’ development at Kittlegairy in Peebles and the seven homeowners’ 2-year battle with Taylor Wimpey. Weak Mortar Taylor Wimpey development Peebles

In 2008, Taylor Wimpey started building houses in Kittlegairy, Peebles,  approved by Scottish Borders Council with designation (iii) prescribed mix mortar specified. That is mortar with a cement content of 14% – 17% and deemed equivalent to an M4 factory produced design mix mortar. Unbeknown and undeclared to Scottish Borders Council, Taylor Wimpey, for reasons as yet unknown, used a Tarmac silo M2.5 design mix which had a cement content 6% less than that approved and under HALF the cement content required (M6 or 1:3-4) to meet the NHBC warranty standard for areas of severe exposure, in which this development is located.

Tarmac Silo Design Mix Mortar

Sheila ChalmersPeebles homeowner Sheila Chalmers first contacted me for advice in October 2017 and featured on the programme. She told me: “In 2008, the Tarmac Mortar Specification Sheet (as supplied by Taylor Wimpey) stated that their M2.5 mix was the equivalent strength of (iii). This has changed since (I do not know when) with Tarmac’s current literature saying that their M4 is now the equivalent of (iii).” Tarmac also state on their website: The mix proportions of Tarmac dry silo mortar conform to values specified in the following table when tested by the methods prescribed in BS EN 1015 and BS 4551.

Tarmac recently confirmed to me that their PDF data sheet (April 2007)  sent to homeowners by Taylor Wimpey is genuine. Perhaps Taylor Wimpey used this data sheet when considering which design mix was required to match the specified designation (iii) equivalent mortar?
Taylor Wimpey attempts at concealing the issue

Sheila told me that around 2011/12 and unknown to the rest of the estate at that time, a house had started to show signs accredited to weak mortar, this being raised with Taylor Wimpey, the NHBC and the Scottish Borders Council. It was discovered that an undeclared change from prescribed mix mortar to design mix mortar had taken place. Sheila said “It was all kept very quiet with Scottish Borders choosing to not alert home owners that their houses may start to fail over the coming years.” Peebles site plan showing extent of homes Taylor Wimpey built using incorrect M2.5 mortarIn the years that followed, houses started to empty, with people literally disappearing overnight – Taylor Wimpey were buying back houses. Sheila indicated that “probably around 10 or 12 houses but it was still being kept hushed up. People were signing gagging orders and therefore kept quiet. Taylor Wimpey’s solution at the beginning of this, was to buy back the homes and silence the homeowners with non-disclosure agreements” Apparently some of the homeowners recently confirmed that Tradecast the repointing contractor, had been put under “severe pressure” by Taylor Wimpey and were instructed not to acknowledge any issues when challenged by homeowners. “In the early days, Taylor Wimpey were wanting Tradecast to park off-site and take taxis onto the estate in order to keep the problem quiet”

On 28 September 2016, four years after the mortar started to crumble on the first home,  Taylor Wimpey wrote to home owners admitting “some of the homes” did not meet the requirements of the NHBC. It outlined a 20-year extension warranty cover for mortar on every home on the development. Apparently then, if any homeowner was concerned, Taylor Wimpey would inspect with their engineer. Shelia told me that “as would be expected most did, with the majority being informed that there was nothing wrong with their houses, this despite owners now “scratch testing” their own mortar and seeing it crumbling away.” More owners began having their own mortar tests done with a wide variety of results, from between designation (i) 30% cement, to below (iv) less than 10% cement

Sheila said that Scottish Borders Council were coming under increasing heavy pressure from concerned homeowners and, after several families provided their structural results to the Council, it was forced to arrange its own structural assessment which carried out by Harley Haddow, on a random selection of houses within the development on 17 May 2018 . The Harley Haddon report had similar findings as the owners’ structural reports and giving a 10-year timeframe “the mortar will weather, will subsequently weaken and will undoubtedly result in failure” for the properties built with M2.5 mortar.

Harley Haddow’s report, shared with Taylor Wimpey, ultimately resulted in Taylor Wimpey letter on 19 September 2018 to all houses built with M2.5 mortar. It advised homeowners, despite Taylor Wimpey’s original rejection of repair works in many cases, that it has now finally agreed to carry out repointing works if the homeowner requested. The company still maintains that “only some houses in phase one have a durability issue and a significant number of houses where no issues have been identified.”
Weak mortar at Taylor Wimpey development in PeeblesSo despite Taylor Wimpey stating in their 2016 letter “we are fully committed to carrying out the works that are needed for the remaining affected homes as soon as possible” nevertheless, over three years later, homebuyers like Sheila have had a long battle with Taylor Wimpey to arrive at such an undertaking. Sheila says that “we felt that at that time if there was a problem, Taylor Wimpey would step up and rectify the problem no questions asked.”  The repointing Taylor Wimpey has finally agreed to “falls way short of what we should all be getting, ie, knock down and rebuild of our properties.”

“…the repointing of joints on walls where purposeful demolition and reconstruction should have happened”
Jo Churchill MP for Bury St Edmonds House of Commons debate (13 Dec 2017)

Even in statements for the BBC Victoria Derbyshire programme last week, Taylor Wimpey maintain that raking out and repointing with M6 mortar, which they have now finally agreed to carry out for Sheila during this summer, is still considered by them not to be necessary for Sheila’s home. This despite independent laboratory analysis of the mortar her home was built revealing as low as 8% cement content. It is interesting to note that Taylor Wimpey used Alastair Dick from David R Murray Consulting Engineers the same consultants that produced some of the engineering plans who have been involved in the project all along, can hardly be considered independent. When Sheila spoke to Mr Dick a couple of weeks ago, he told her “he was now relieved that Taylor Wimpey had agreed to repoint all the houses.” Sheila said, “you’ve knocked mine back several times” he told her “… there was a lot of pressure on them before the agreement was put in place.”
Independent mortar test resultsHowever, Taylor Wimpey told the BBC that the tests Sheila and her neighbours used were “not appropriate.” It said “The weaker mortar used on some of the houses is of sufficient strength to meet structural requirements… but it may present as less durable under prevailing exposure conditions”   “May”?

The good news is the internal mortar with 13% cement content just under the lower end of the 14% for M4 mix so could possibly be structurally sound. However the cement content of the remainder of the external walls falls below even M2.5. Of particular concern is the mortar used below ground which should have been a 1:3 mix as it is often saturated and subject to the actions of freeze thaw, even more likely in this area.

The 25mm deep raking out of mortar joints and repointing works will only improve durability and does not address the issue of the potentially weakened bond with the wall ties, reducing the stability and integrity of the cavity wall, which could in certain conditions, result in external walls becoming unstable and dangerous on exposed elevations. However, it is interesting to note that wall tie pull out tests, arranged by Taylor Wimpey and witnessed by Harley Haddow, found a pull out of 1KN or more, greater than the anticipated tension loads of 0.6KN and “the tensile capacity had not been demonstrably compromised by the bedding mortar’s friability. “

It is unimaginable, the extreme anxiety, worry and mental anguish that at times, must have been almost unbearable and detrimental to health, suffered by Sheila and her neighbours. This coupled with the expensive legal fees (around £350 an hour), structural survey fees and the cost of mortar testing which basically forced Sheila’s household into debts totalling £16,000, all caused by Taylor Wimpeys’ intransigence and the NHBC’s ongoing denial of what I believe, is a wholly valid warranty claim, over the last 24 months. Sheila told me “this could have all been avoided if Taylor Wimpey had admitted it instead of trying to bat this away and lie through their teeth. They knew all along when they built this bodged Estate but were quite happy to lie to us and say all is well, forcing us to spend huge sums (I am not the only one) to prove it. Legally, they don’t even have to reimburse our fees despite us proving all this.” Although Taylor Wimpey has told the BBC they will now do so.

Pete and Jill Hall have "garage built with sand"Sheila’s neighbours three doors away, Pete and Jill Hall also had a 2-year fight on their hands with Taylor Wimpey. They too had independent testing of their weak mortar, which in the worst case showed their garage had such a small cement content it could be considered to be built with virtually wet sand! After a heated meeting with Taylor Wimpey’s solicitors, Dentons UKMEA LLP, during which the Halls outlined the only options they would accept either: 1) Buy back the house, 2) Demolish it entirely and re build as it should have been or 3) Carry out works required to bring it to the standard it should be; much to their astonishment they received a letter from Taylor Wimpey’s solicitor. It said they were considering reporting the Halls under “Proceeds of crime legislation” with allegations of “clear and specific threats linked to demands of money and offering to conceal information if such money was paid and other demands met” Not quite as Taylor Wimpey claim “we always aim to do the right thing for our customers?” Now two years on, Taylor Wimpey has made an offer to the Halls. Jill told the BBC “It falls short of where we think a proper full repair should be but they [Taylor Wimpey] have basically turned round and said it’s that or nothing….I would never buy a new house again”

Notwithstanding the site-wide weak mortar, apparently this development also had other “workmanship” issues. As noted in Harley Haddow’s report: they “found examples of what we consider poor overall site quality control, over and above that of the mortar.” This including: poor restraint strapping details, homes with garden rooms where foundations are misaligned, missing wind posts in some house types and external DPCs below ground level. Shelia says “and the list goes on with regards to boilers and heating systems supplied.”

What about the NHBC? “Protecting homeowners”?

Shelia asked the NHBC reinspect her house and yet again it rejected her warranty claim saying that despite obvious gaps and holes in mortar joints there is no evidence of physical damage. At that time Sheila tells me the NHBC were made aware that M2.5 mortar had been used and not the M6 required for severe exposure areas and required in the NHBC warranty standards, but still “they would not budge”. Even the NHBC’s own inspector report concluded that the mortar class used throughout this development “indicates it may not be suitable to provide adequate durability”
NHBC Inspector's weak mortar report Peebles

“Once mortar deteriorates it will compromise the rest of the brickwork.” BDA

The final response from the NHBC:

Sheila’s home is now outside the 10-year warranty (by 5 months) and as far as the NHBC are concerned “that’s end of the matter”. The NHBC said:

“I should advise you that this is unlikely to change our view on liability. Section 3 of the Buildmark policy provides cover for actual physical damage to the home that was caused by a defect in a part of the property listed in the policy document if the cost of repair is more than the minimum claim value. Regardless of whether, or not it is identified that there is a defect with regard to the specification and/or preparation of the mortar mix this item is not covered by the policy in the absence of actual physical damage to the home.

The construction is now 10 years old and during this time the mortar can be considered to have generally performed, given that there is little sign of erosion to date to indicate any failure within the compressive strength of bedding material used and/or impair the structural integrity of the load bearing walls. As such, the criteria that is required for a valid claim under the terms of the policy has not been met.”

This, despite three separate independent Structural Engineers reports concluding: in the longer term (beyond 10 years) the mortar will weather, will subsequently weaken and will undoubtedly result in failure.”
Are NHBC worried about the high costs of remedial works?
So much for the NHBC:
“Preventing problems before they happen and being on hand when they do” Their own technical materials requirement R3 in the warranty standards states: “All materials products and building systems shall be suitable for their intended purpose”  That is having a life of at least 60 years.”

In my opinion, the NHBC are behaving abysmally regarding the issue of weak mix mortar. It is a serious issue which the NHBC have been aware of for many years. As far as I am aware there is no research being carried out to discover why it is on the increase. The NHBC has not revised its standards to prohibit the use cement substitutes such as GGBS and PFA or to require regular ongoing site testing of mortar used.

NHBC Technical Newsletter July 2000 Issue 20:

The consequences of getting it wrong are well known to NHBC. At the least it may mean raking out all joints and repointing and at worst it can be removing the outer leaf and rebuilding. The problem is that too little cement is added to the mix to ensure that the strength is achieved and, perhaps more importantly, the hardened mortar is durable.”

In addition, the NHBC’s Technical Extra Issue 11 in September 2013  (Page 22) specifically warns against using M2.5 design mix factory mortars.
NHBC have known about issues with M2.5 mortar for yearsThe NHBC spent a total of £94.6million on remedial works on warranty claims in the 12 months to 31 March 2018, around 11,000 claims a year. Around £28 million for claims made during the first two years. Superstructures (walls including render/floors/roof) accounted for around 38% of the total cost of claims in 2015/16. The NHBC has reserves of £462million and additional investment assets totalling £1,560million. This non-profit distributing organisation, can well afford to do right by those new homeowners with weak mix mortar policyholders.
Repointing works to 130 Taylor Wimpey new homes at PeeblesTaylor Wimpey is currently repointing 130 homes in the M2.5 area of the development, but not those built using M4 mortar. Taylor Wimpey said they “sincerely apologise to the homeowners affected… we are fully committed to resolving matters” They claim “this is a localised issue and falls short of the high standards we uphold. We are committed to carrying out the works that are needed to the remaining homes as soon as possible” However, Taylor Wimpey’s latest letter advises that it considers it is not under any obligation to undertake this work and it is committed to complete all repointing work within three years! Sources on site, tell me their contractor Tradecast is aiming to complete repointing works on 90 houses by the end of this year and surprisingly, some homeowners being unwilling to have the work done at all.

Sheila has raised a formal complaint against the NHBC through their complaints team.

The NHBC’s 86-year old ‘go-to’ “mortar expert” Barry Haseltine stated in his report:

“I recall that, up to 2012, Tarmac were concerned that achieving a strength of 4N/mm2 would require them to use more cement than they would have done in a prescribed mortar of the equivalent designation, (iii). I suspect that the designation (iii), M4, was used throughout; however from what I can see of the mortar quality in photographs taken by the Claims Investigator, there is nothing that I can call damage within the NHBC definition of the word. The house is structurally sound and should remain so for a normal life. There is no need for any remedial work.” 

Barry Haseltine basing the statements in his report from NHBC photographs and never visited Sheila’s home and inspected it himself.

The NHBC would appear to base their rejection of the M2.5 mortar when M6 is required purely on the basis it hasn’t (as yet) structurally failed in the last 10 years!

Taylor Wimpey Annual Report 2018 (27 February 2019)

This specifically makes reference to Sheila’s development although again, plays down just how potentially serious and expensive it could be for its shareholders.

“We acknowledge concerns raised by some of our customers in connection to mortar durability on a development in Peebles, Scotland. While a significant number of houses on the development are unaffected, a robust technical solution, supported by an appointed structural engineer and the NHBC, to fix the durability of the mortar has been identified and homes are being remediated as soon as possible”

This despite the company knowing about the weak mortar issue in 2011 and all homes built using a mortar not considered sufficiently durable for the severe exposure location of this development!

It would appear that Taylor Wimpey also have structural failings on their 2013 development ‘The Chariots’ in Andover.  As I understand it, the roofs to 75 homes are being removed, work which will take 2 months per house to complete.Taylor Wimpey extensive remedials at The Chariots Andover

Taylor Wimpey 30-year weak mortar warranty

In their letter dated 28 September 2016, Taylor Wimpey undertook to provide a total of 30-year warranty up to 31 December 2045, for “issues specifically caused by mortar quality” for EVERY home on their ‘Kingsmeadow’ development in Peebles. This does not include what it refers to as “fair wear and tear” but “defective mortar which has failed to maintain its strength and durability” It would appear the mortar warranty is only for the external mortar which can be seen. Amazingly, Taylor Wimpey also said  it “takes such concerns seriously and stand by the quality of our construction.”

No integrity. Taylor Wimpey CEO Pete Redfern should apologise to Peebels homeowners in person.Obviously in 2045 everyone will have departed this mortal coil and CEO Pete Redfern will no doubt be keeping ex-Persimmon CEO Jeff Fairburn company, stoking the fires of hell. It will be interesting to see whether the correct mortar (M6) is used on the adjacent development land. I very much doubt any works will begin until long after the current repointing works are finished.

For those wishing to take legal action against their housebuilder, the case of Halvorson v Persimmon Homes 2018 (Scotland) is case law which determined that all NHBC warranty standards form part of the contract and non-compliance of any guidance or recommendations could be judged as a breach of contract.

A sea-change of behaviour is required

It is time the tin-eared, corporate bean counters running the nation’s plc housebuilders did the right thing right away and stopped trying to minimise what are huge issues like weak mortar. First with denial, then the great cover up, using non-disclosure agreements limit their exposure. Finally, as on this Peebles development, when a weak mortar issue became widely known, threatening, intimidating and mentally torturing its own customers for two years before finally agreeing to undertake repointing works to all 130 houses. This has got to stop!

This whole industry lacks moral integrity. It says one thing, then does the opposite,  frequently exposed lying and cheating its own customers, concealing the extent of defective homes and quietly carrying on with apparent impunity from this weak government. James Brokenshire promised a new homes ombudsman but has yet to deliverIt is to be hoped that the current Housing Secretary James Brokenshire is good on his word and legislates for the statutory new homes ombudsman which in his words: “will champion home buyers, protect their interests and hold developers to account.” as a matter of urgency, a government priority, rather than as current, “when parliamentary time allows.” Make time!

Until government acts, new homeowners like Sheila and her neighbours will be left wondering,  in the words of the Pet Shop Boys,
“How I’m gonna get through  ……….what have I, what have I, what have I done to deserve this.”

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Taylor Wimpey Announces £130m Leasehold Sticking Plaster Solution To Housebuilders’ PPI

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 Loddon Park Freehold but far from problem freeTaylor 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 ground rent review letterTaylor 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”.

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Commons Debate Leasehold New Houses Scandal

“The PPI of the house building Industry”

The APPG for Leasehold and Commonhold Reform managed to secure a debate in the commons chamber on Tuesday 20th December 2016 to discuss the leasehold new houses scandal. With 53 APPG members, it was surprising that only 13 MPs and Housing Minister Gavin Barwell attended initially. I previously highlighted the scandal of leasehold new houses on 7 November 2016 entitled “The next mis-selling scandal” This phrase apparently being picked up, with the Labour MP for Ellesmere Port and Neston, Justin Madders calling the practice during the debate as “the PPI of the house building Industry”. See also Never buy a leasehold new house 28 October 2016

leasehold new houses scandal

Leasehold new houses scandal

LeaseholdAn analysis by the excellent campaign group  Leasehold Knowledge Partnership (LKP) in November 2016, revealed that 8,775 new-build leasehold houses totalling nearly £2billion were sold in England and Wales last year. In all around 45,000 new houses have been registered as leasehold. Many of these bought with help from taxpayers’ through the Help to Buy scheme. In most cases, the housebuilder sells the freehold after a couple of years to a private company, which can then demand extortionate fees from homebuyers.

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The Redfern Review – How Is CEO Peter Redfern Doing At Taylor Wimpey?

peter-redfernIt has been over seven months since Taylor Wimpey released its results for the full year to 31 December 2015 (1 March 2016). This included a statement from Chief Executive Peter Redfern, which recognised improvement was needed with regard to his company’s poor customer satisfaction levels. Perhaps it is time to take stock and conduct our own ‘Redfern Review’.

Peter Redfern said:

“During 2015, we achieved a customer satisfaction score of 86% (2014: 87%). We are disappointed that this has slipped. Whilst we operate in a cyclical market, we strongly believe that a customer centric approach is needed throughout the cycle. During 2015 we completed an in-depth review of every aspect and stage of our Customer Journey, to identify areas of improvement and to deliver a better homebuying experience for our customers. Throughout the review, our focus has been on understanding our customers’ priorities to enable us to deliver at and ahead of expectations. We have also commenced the process of rolling out our new customer approach across the business with a focus on three main areas: our culture, management structure and process. This is to ensure that going forward we deliver the right product, supported by excellent customer service to all our customers at every stage of their journey with Taylor Wimpey.

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Defective Taylor Wimpey new home causes injury to 10-year-old girl

Enough is enough! What will it take before government finally acts, not only to end the misery faced by the majority of people that buy new homes, but also to drastically reduce the likelihood of another death caused by a defect in a new home? Last week a defect in a Taylor Wimpey new home injures a 10 year old girl.

Oliver Colvile MP

Time for action? APPG Chair Oliver Colvile MP

Since the APPG Inquiry published its Report  ‘Into the Quality of New Homes’  three weeks ago, there has been zero coverage of its recommendations in national media. On a personal level, I have written to every single one of the 650 MPs asking for their support and to lobby the DCLG for the introduction of a New Homes Ombudsman. Just one MP has replied so far. Is anyone prepared to do anything before someone else is killed in a defective new home?

On 15th October 2005, a four-year-old boy died from chest injuries after a 50kg (110lb) stone mantelpiece over a fireplace fell on top of him at his Persimmon-built family home in Coulthard Close, Towcester.

In February 2008, Elouise Littlewood was 26 when she died in the flat she owned with Notting Hill Housing Trust built by Barratt Homes at their Bedfont Lakes complex in Hounslow. A post-mortem carried out on the body found the concentration of carbon monoxide in her blood was 77 per cent. Her lodger, Simon Kilby, was left with permanent brain damage after he was discovered unconscious on the sofa.

Only this morning I learned that on 28 July 2016, a radiator had detached from a wall and had fallen on 10 year-old Gemma Fever in the kitchen of the family’s Taylor Wimpey new home at their Rackenford Meadows development in Tiverton, Devon.

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Quality compromised in rush to build new homes

At last! Peter Redfern admits quality is being compromised in the rush to build new homes

Pete RedfernTaylor Wimpey CEO Peter Redfern has said that the Government’s target to build a million homes by 2020 is unachievable and quality will be compromised if the industry does try to meet it. Well if anyone should know about compromising the quality of new homes it’s Redfern! Taylor Wimpey has a terrible reputation for building poor quality homes and when their customers complain, an equally poor record and attitude to fixing these defects. This, despite the claims made on Taylor Wimpey’s website including: “The standard of home building in the UK has never been higher than it is today.”   ” it’s like buying a brand new car and driving it out of the showroom” Only with a new car it is unlikely to have as many problems as a new Taylor Wimpey home!

Only last November, Taylor Wimpey were extensively featured on the Dispatches Documentary “Britain’s Nightmare New Homes.” In 2012 Taylor Wimpey were again panned on the BBC Watchdog programme.

The company’s unhappy buyers regularly lambast the builder on social media with the twitter feed #thinkwimpeythinktwice. On 5th December 2015,  BBC South today recently featured the story of Evelyn Lallo who has been living in temporary home since June 2015, whilst Taylor Wimpey sorts out serious defects.

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Corbyn appoints Taylor Wimpey CEO Redfern to advise on housing

Pete Redfern Taylor Wimpey CEO is Corbyn’s appointed housing tsar.

CorbynIt would appear new labour leader Jeremy Corbyn has appointed Pete Redfern, chief executive of Taylor Wimpey, to lead a review of housing to help form Labour policy on the issue. Quite what housing expertise Corbyn thinks Redfern, with his background in accountancy, can bring to the table is a mystery to me. If is often said that accountants know the price of everything and the value of nothing. Redfern trained as an accountant with KPMG. He then became financial director of Rugby Cement before he joined George Wimpey in 2001. He  became CEO of Taylor Wimpey in July 2007 following the merger with Taylor Woodrow.

He chose PoorlyIt has emerged that Corbyn’s newly appointed housing adviser is the CEO of a British company that has been associated with tax avoidance. Mr Corbyn, you have chosen….. poorly!

Documents show housebuilders Taylor Wimpey had a Luxembourg division which it used to cut its UK tax bill – exactly the kind of scheme that Corbyn and Shadow Chancellor John McDonnell have pledged to bring to an end.

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Taylor Wimpey CEO Peter Redfern suggests there is scope to increase prices of new homes even in a falling market!

The Daily Telegraph recently published a story featuring Taylor Wimpey CEO Peter Redfern claiming that new regulations following the Mortgage Market Review, which have restricted borrowing for second-hand homes, have not adversely impacted the business and Help to Buy is still being used by their first time buyers. The company also announced that it is fully sold for 2014 and has confirmed a profit upgrade.

Pete Redfern

Peter Redfern

Mr Redfern, in a somewhat blatant attempt to talk up the prospect of further  new home price increases, is claiming that housebuilders have more room to adjust prices upward since they were starting from a lower base, having fallen behind valuations for existing homes after the great recession. So are we to interpret that, housebuilders such as Taylor Wimpey have not increased their prices in line with the general local market since 2008?

He said:

“Housebuilders have to keep liquidity in the business and have more room for price adjustment sellers of existing homes by contrast may take their property off the market if they are not getting the right offer. Big houses in the country market are also proving harder to sell, where housebuilders are not that prevalent. This is having a negative impact on the outlook for the market for existing homes.”

Schemes, in particular Help to Buy, continue to give the new home industry a taxpayer-subsidised helping hand.   “………..attractive products that help credit availability and affordability – whereas stricter mortgage rules have started to affect sales in the second-hand market. After the downturn mortgage lenders penalised new build specifically apartments as they felt young buyers posed a greater risk with good incomes but low deposits, but these differences are starting to unwind.”

If new homes were penalised, it was because there is always  a 10-20% price premium. Lenders required higher deposits to give more of a buffer to account for the premium and added risk of steeper falls in valauations should the market turn.

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House builders react as Ed Miliband re ignites his land grab mandate

Ed MilibandIn a speech to the party’s national policy forum, Mr Miliband is set to confirm that increasing the number of new homes built each year will be a key priority for an incoming Labour government. He will confirm measures to force house builders to stop hoarding land with his “use it or lose it” proposal. 

Other options also being considered include giving councils the power to fine companies that own large areas of undeveloped land or to require them to pay council tax or a special “land tax” on the undeveloped land in question. As a last resort house builders who refuse to build could find themselves facing a compulsory purchase order.

Mr Miliband will say: “We have to be willing to confront some of the obstacles to house-building. Across our country there are firms sitting on land waiting for it to accumulate in value and not building on it – landowners with planning permission who simply do not build. We have to change that… permission to build should mean landowners build.” 

Mr Miliband recognises that the profits of the biggest four developers by volume – Barratt, Berkeley, Persimmon and Taylor Wimpey – have risen by 557% since the coalition took office. The number of homes completed by these firms increased by just 4,067 in 2012, and the number of affordable homes built last year actually fell by 26%. 

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