Taylor Wimpey sets aside £130m for ground rent rows

Home-House-Money-Property-700x450.jpg

Builder Taylor Wimpey has set aside £130m to cover leasehold disputes that have seen some new build homeowners pay rising yearly ground rents to freeholders.

Taylor Wimpey says it started using the lease terms ten years ago in good faith, according to the Financial Times.

But a wave of customer complaints have caused the firm to reconsider the clauses.

The company says: “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…

“For those customers who acquired from, and remain the owner of a Taylor Wimpey leasehold property which is subject to this specific doubling clause, we have already entered into negotiations with the respective owners of the majority of the freeholds to alter the terms of the doubling lease to materially less expensive ground rent review terms, with the Group bearing the financial cost of doing so.

“As a consequence of this decision, the Group will make a gross provision of c.£130 million that will be recorded as an exceptional item in the 2017 first half accounts, which will have an impact of c.3 per cent of net assets.”

Some property developers have been accused of selling houses under leasehold terms that mean homeowners pay ground rents to the freeholder that can double every five or ten years.

Earlier this month Mortgage Strategy reported the Government could ban unfair leasehold terms for new build houses.