Taylor Wimpey bonus “slashed” from £1.08 million to £827,757 after leasehold scandal

“Housebuilder Taylor Wimpey has slashed 23pc from its directors’ bonuses in response to the scandal over punitive leasehold terms.

The company’s annual report shows that chief executive Pete Redfern received £827,757 through Taylor Wimpey’s executive incentive scheme (EIS), rather than almost £1.08m as originally planned.

Ryan Mangold, finance director, and James Jordan, legal director and company secretary, also received a 23pc cut in their bonuses for 2017.

Taylor Wimpey has come under fire for selling homes with leasehold terms which mean the ground rent payable by the homeowners doubles every 10 years. In some cases, this has made the houses unsellable.

The homebuilder said the scaling back of bonuses was a “meaningful and proportionate approach to take”, even though the leasehold issue had not directly inflated the bonuses last year.

Meanwhile, housebuilder Persimmon has confirmed that chief executive Jeff Fairburn will receive a total pay packet of £47m this year thanks to a generous long term incentive plan agreed in 2012 which came to maturity last year. His total bonus award was due to be around £100m over two years, although it was later reduced to £75m.

Mr Fairburn has said he will give some of the money to charity.”

https://www.telegraph.co.uk/business/2018/03/19/taylor-wimpey-slashes-bonuses-leasehold-scandal/

John Lewis pension fund investing in controversial home leaseholds

“Thousands of young homebuyers remain trapped in virtually brand-new homes made unsaleable by spiralling ground rents and abandoned by developers such as Taylor Wimpey, despite a ban on the charges promised by the government.

Guardian Money can also reveal that the £5bn John Lewis pension fund is behind the soaring rents that have made the lives of some homeowners a misery. …”

https://www.theguardian.com/money/2018/jan/13/ground-rent-young-homebuyers-charges

Taylor Wimpey and Cranbrook … not a happy partnership

Taylor Wimpey’s Facebook page has some VERY unflattering comments about their houses in Cranbrook, and Cranbrook itself – poor construction, parking problems, not enough shops, no 1 bed properties, size of rooms disputed, checks not made, repairs not done …

Oh dear.

“Help to buy has mostly helped housebuilders boost profitsl

“The chancellor, Philip Hammond, is lining up another £10bn to extend the “help to buy” programme first launched by George Osborne in 2013, which has already sucked up £10bn of taxpayers’ cash. Yet a report from Morgan Stanley – not usually the type to stick the knife into a flagship government policy – lays bare how this colossal sum has been almost entirely wasted.

Those billions have not helped buyers. The money has gone almost entirely into the pockets of the giant housebuilding firms, which have raised the price of developments by almost exactly the amount made available by the government. All it has meant for first-time buyers is more misery – by pushing up house prices.

Help to buy works by giving aspiring homeowners an interest-free government loan worth up to 20% of a property’s value – if the buyer opts for new-build. The idea was that it would provoke a wave of new building.

But the Morgan Stanley report, headlined “The help to buy premium – and its unintended consequences”, drily unpicks the data, revealing how the beneficiaries have been the major developers. Researchers compared the price of new-build houses in 2013, when the scheme began, with the price of existing or “second-hand” houses.

There has always been a small premium for new-build; people will pay extra for spanking-new kitchens and bathrooms. But since 2013, that premium has rocketed. “The divergence between new-build and second-hand prices is higher than it’s been since records began,” says the report.

It says that the price of new-build has outstripped second-hand by 15% since the start of help to buy. “We are now around 5% points away from the level at which new-build prices have diverged by the full amount of the government’s equity loan (20% of house price across England).”

Of course, Morgan Stanley didn’t produce this report for the likes of me to make a dig at the government. Its interest is in the share prices of the major housebuilders. It worries that the big builders won’t be able to get away with charging a premium of more than 20% for new-builds, and that the super- profits may be coming to a close.

Make no mistake about just how much help to buy has fuelled developers’ profits. The new-build market is increasingly reliant on help to buy, with the large builders – Barratt, Taylor Wimpey, Persimmon – suggesting that about half of their volumes are help-to-buy purchases. And what a brilliant money-making wheeze it has been. Morgan Stanley says: “Help to buy (and broader house price inflation, among other things) have helped housebuilder earnings triple since its launch.”

The builders will say the scheme has, indeed, provoked some supply, but evidence is thin. Morgan Stanley says: “Though it has helped drive supply, figures provide ammunition for critics who suggest it has pushed up prices, rather than making them more affordable.”

Despite this, Hammond is preparing to bung another £10bn at the developers – perhaps to “give clarity and certainty” about the scheme – which even the rightwing Adam Smith Institute says is “like throwing petrol on to a bonfire”.

But George Osborne didn’t need investment banks or thinktanks to tell him this back in 2013 when he launched this madness. Guardian Money at the time spoke to the people at the sharp end: young people excluded from the property market. Duncan Stott of the PricedOut group was particularly prescient: “Help to buy should really be called ‘help to sell’, as the main winners will be developers and existing homeowners who will find it easier to sell at inflated prices. Pumping more money into a housing market with chronic undersupply has one surefire outcome: house prices will go up.”

But the government chooses to listen to the developers instead. Britain’s housing market is broken, and help to buy is just making it worse.”

https://www.theguardian.com/money/blog/2017/oct/21/help-to-buy-property-new-build-price-rise

Government and developers creating NIMBYs

“The biggest housebuilders are creating growing numbers of nimbys by trampling over communities and building ugly, unaffordable homes, the head of a homelessness charity has warned.

Polly Neate, the chief executive of Shelter, said that developers were putting profits before people and ignoring concerns about the quality and price of new homes.

She blamed the builders for “a huge loss of public faith in our housebuilding system” and called for reforms to planning laws to put people’s needs before corporate profits. “Even when communities create detailed plans for housing developments, these developers brush them aside and build unattractive, unaffordable homes,” she said. “This means many [people] choose to oppose new homes rather than go through a long planning process, only to be ignored in the end.”

The three biggest housebuilders, Persimmon, Taylor Wimpey and Barratt Developments, completed more than 46,000 homes last year and shared revenues of more than £11 billion. They made profits of £2.2 billion.

“The government needs to bring in a new way of building homes which listens to local people to build the high quality and genuinely affordable homes they need, along with schools, parks and other amenities,” Ms Neate said. “We once had a proud tradition of housebuilding in this country, as seen in our popular postwar new towns and garden cities, and it is now critical this is revived for the 21st century.”

Her comments came after a survey of more than 3,500 people found that only 13 per cent felt that developers listened to them. Almost 60 per cent said that they would be more inclined to support the building of new homes if they were listened to more keenly. The southeast had the highest proportion of nimbys, at 38 per cent, while the West Midlands had the lowest at 23 per cent.

The Times revealed last month that a consortium of housebuilders behind a new garden town in Devon had watered down its strict design code. The Sherford development on the outskirts of Plymouth was designed by the Prince of Wales’s architects to prove that his model village of Poundbury in Dorset could work on a larger scale.

The Prince’s Foundation for Building Community said that the builders, Bovis Homes, Linden Homes and Taylor Wimpey, used arcane planning laws to renege on their commitments to quality. Ben Bolgar, the foundation’s director, said they were determined to build a “normal, rubbish housing estate” instead. The consortium said the quality of the homes would not be affected.

Stewart Baseley, chairman of the Home Builders Federation, an industry body, insisted that his members “work closely with councils and residents to ensure the homes being built are what communities need”.

“Housebuilders have dramatically increased output to provide desperately needed homes,” he added. “Constructive debate is needed to develop policies that allow more homes to be built as opposed to baseless claims.”

Source: The Times (pay wall)

“Builders gag buyers over shoddy work”

Buyers of substandard new homes are being asked to sign gagging orders to keep the faults secret and are routinely refused access to technical plans that show how their properties should have been constructed.

Some owners are then locked out of their homes during repairs, an investigation by The Sunday Times has found.

The research reveals how builders wield power over buyers at every stage of the new-build market, allowing quality to slip as the government spends £43bn on stimulating private housebuilding to try to hit a target of 1.5m new homes by 2022. …”

Sunday Times, page 4 (paywall)

The article talks of builders forcing people to sign non-disclosure agreements and are forced out of their homes so they cannot see what work has been done before remedial work is carried out so neighbours and press cannot find out.

Bellway, Taylor Wimpey, Strata, Barratt and Bovis mentioned for various alleged transgressions.

Another Taylor Wimpey new-build horror story

Denise De Souza, 30, was seven months pregnant when she went to get a mug out of her kitchen cupboard in Dartford, Kent, before it fell on top of her and landed it on the floor. …

http://www.dailymail.co.uk/news/article-4555608/Distraught-wife-feared-daughter-brain-damage.html