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Taylor Wimpey tackles escalating leaseholds as new build sales grow

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  • 27/04/2017
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Taylor Wimpey tackles escalating leaseholds as new build sales grow
Taylor Wimpey is setting aside £130m to address the issue of homeowners with escalating leasehold arrangements.

As Mortgage Solutions reported last month, the subject caused communities secretary Sajid Javid to announce that buyers would not be allowed to use the Help to Buy scheme on certain leasehold properties.

“I don’t see how we can look the other way while these practically feudal practices persist,” said Javid.

The biggest outcry was regarding homeowners who were subject to leasehold payments doubling every ten years, rather than by other typical measures of inflation.

In a statement, the builder said: “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,”

“In the event that we are not able to reach agreement with individual freeholders, we will continue to pursue other avenues to help our customers,” it added.

 

Strong market

However, the house building market appears in good health as Taylor Wimpey and fellow house builder Persimmon reported strong results in interim reports for Q1, with both firms ahead on sales rates compared to last year.

Taylor Wimpey said its average private net reservation rates were 16% ahead of the prior year at 0.93 sales per outlet per week for the year to date (2016 equivalent: 0.80).

Its total order book stood at 9,219 homes, up 4.6% on 2016 week 16.

Likewise, Persimmon said its sales rate was now 4% ahead for the year to date.

It had sold 8,928 new homes with an average selling price of around £229,500, an increase of 4.1% over 2016.

Persimmon added that despite continued difficulties encountered with planning delays, it had opened 67 of the 90 new sites planned for the first half of the year.

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