Call me cynical but is the recent announcement by Taylor Wimpey that it is setting aside funds to assist purchasers of its homes cope with “unfair” ground rent increases anything more than a PR gimmick?
TW clearly understood the effect of the terms it was imposing when the long leases were granted 10 years ago and has presumably made a tidy profit selling on the freeholds to third parties who could also see the potential gain.
Now that the tide has turned the negative publicity has resulted in promises of recompense and support for the homeowners who have lost out.
Far be it for me to dish the dirt on my own profession but whilst I am not really surprised that TW and other third parties may have taken advantage of less sophisticated buyers where were the lawyers and other professional advisers when all this was going on? Surely any solicitor of worth would have pointed out the undesirable effect of doubling the ground rent every year? And wouldn’t they have been pointing the position out to mortgage companies as well?
Forget TW, if I were a buyer I’d be checking what advice my solicitor gave me at the time. And if I were a PI insurer I’d be bracing myself for a deluge of potential claims.
Taylor Wimpey has apologised to leaseholders and set aside £130 million to sort out a problem with the terms of its leases for new-build houses which can see ground rents soar over the long term.
The house builder has just completed a review of its leasehold terms, focusing on a clause that sees ground rents double every year until the 50th year, at which point the rent is capped.
This can mean that a ground rent of £300 a year would cost £9,600 after 50 years, causing financial hardship but also making it difficult for homeowners to sell their homes.
This arrangement was introduced in 2007 and was used until late 2011 when a new system was introduced linking grounds rents to inflation.