Taylor Wimpey gears up to compensate buyers for lease greed

“Housebuilder Taylor Wimpey PLC has revealed it will make a £130mln provision to cover disputes over leases taken out by customers that have left some of them with a doubling in ground rent as it unveiled a good start to trading in 2017.

In a trading statement ahead of the housebuilder’s annual meeting today in London, Taylor Wimpey’s chief executive, Pete Redfern said that following conversations with freeholders and lenders the group is unveiling “measures which will address our customers’ concerns in an appropriate and fair manner.”

The FTSE 100-listed firm said it entered into the lease structures in 2007 “in good faith”, but that a review sparked by customers’ complaints showed the clauses are causing “understandable concern”.

As a result, the firm said it will make a gross provision of around £130mln that will be recorded as an exceptional item in its first half accounts.

Redfern said: “Whilst there is a financial cost to the Group related to this course of action, we confirm that our dividend targets and land investment programme are not impacted”.”