The new development at Blackhorse Lane is to be built by Taylor Wimpey even though the developer has yet to provide redress to thousands of leaseholders hit by their 2017 doubling ground rent scandal.
We ask the council to safeguard future residents by getting assurances from Taylor Wimpey that
• buyers are free to use a conveyancing solicitor of their choice.
• freeholds are not resold without giving leaseholders first refusal.
• ground rents will be fixed with no escalation.
• consent fees are reasonable and only required for structural alterations.
If you have concerns about this please share them with Cllr Simon Miller, Minister for regeneration.
In Ellesmere Port near Liverpool, Taylor Wimpey sold hundreds of self-contained houses as leasehold and persuaded buyers to use TW ‘preferred’ solicitors, who failed to warn them about clauses that would soon make their properties unsellable. Telegraph Money reports a reservation document that offered the buyer £4,000 towards legal costs with “Nom sol only” (nominated solicitor) clearly written in the terms of sale.
Leaseholders were told they could buy the freehold at a later date for a modest sum, only to find it sold to another company asking 10-12 times the amount. Lindsay describes being offered the freehold for £2,600, only to find two years later it had been sold to a private investor who wanted £32,000 for it.
Doubling ground rents
The leases had ground rents that doubled every ten years for 50 years, making the homes unsellable. For example a ground rent of £250 in 2010 would be £8,000 by 2059. After a spate of bad press coverage Taylor Wimpey relented and announced in July 2017 they were setting aside £130m to address the problem, resulting in a 25% drop in their annual profit.
But affected homeowners were only offered ground rents adjusted to RPI based annual increases for the full lease length. And when constituents of Justin Madders, Labour MP for Ellesmere Port tried again to buy their freehold, they found the new freeholder knew nothing of TW’s offer.
In April this year, Andrew Selous, Conservative MP for SW Bedfordshire raised a similar case. Taylor Wimpey refused compensation to a constituent with a doubling ground rent because they were a second rather first buyer of the house.
Sebastian O’Kelly of Leasehold Knowledge Partnership said last week that Taylor Wimpey are running their review scheme entirely on their terms – revising doubling ground rents to RPI, rather than fixed. The scheme only applies to people who contact TW and then only at sites where the freeholder is prepared to review the GR terms. LKP is calling for tougher action from government to make the redress more than just a voluntary arrangement.
Government action
Justin Madders, a member of the 140-strong All Party Parliamentary Group on Leasehold Reform (APPG) describes the abuses of leasehold as the ‘PPI scandal of the housing market‘. His constituents, who bought from Persimmon and Redrow as well as TW, also face excessive service charges, 40% insurance commissions, fees for consent to alterations, and threats of forfeiture to leaseholders who challenged the practices.
The APPG successfully prompted Sajid Javid, then Minister for DCLG, to launch a consultation in 2017 on tackling unfair practices in the leasehold market. It received over 6,000 responses. On 21st December 2017 the department confirmed the sale of new leasehold houses would be banned and new ground rents set to zero. He also tasked the Law Commission to report back in the summer of 2018 with suitable reforms. This is now in the hands of the new DHCLG Minister, James Brokenshire.