Taylor Wimpey apologises over unfair ground rent clause

Leasehold houses

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 decade 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.

Taylor Wimpey says: “It is clear from our review that the impact of these doubling rent review clauses is now causing some of our customers understandable concern.

“We acknowledge 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.” 

In many cases, Taylor Wimpey has sold on the freeholds to these properties to third parties and it says that it is negotiating with the owners to alter the terms of the doubling lease to less expensive ground rent review terms.

If it can’t reach an agreement with individual freeholders, it will “pursue other avenues to help our customers”, with £130 million set aside by the group to pay for this.

Your Comments

Well done Taylor Wimpey for acknowledging the issues currently being raised and being hopefully the first to provide recompense to new-build house buyers, often young first time buyers who didn't understand what they were getting into. They thought they were buying a house but were actually just long-term renting (leasehold) and subject to both escalating ground rents, sometimes service charges  and the need to request and pay for 'consent'  for improvements to their homes.  In addition the government were inadvertently funding these sales through help to buy schemes aimed at asisting young people into what was meant to be owning a home of their own.  There are a lot of these estates particularly in the North West where I am and I have seen first-hand how the sales people brush off an enquiry re ground rents referred to as 'escalating' even on sales literature.  It seems the new all-party government working group are on to this and it is being taken up in high places.  Hopefully certainly in relation to houses this will soon be a thing of the past.  A little longer I fear for those of us who suffer with leasehold flats.