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

Beware Taylor Wimpey leasehold compensation offers

“Taylor Wimpey last month offered £130m to buyers trapped in new-build homes with spiralling ground rent contracts. It was a move initially greeted with glee by victims of the leasehold scandal. But as details have emerged, some householders say they will still be left paying “frankly obscene” charges.

Jo Darbyshire bought her four-bed home in Bolton in 2010 from Taylor Wimpey without realising the full implications of the 999-year leasehold contract, which allowed the freeholder to double the £295 ground rent every 10 years. Only when a neighbour’s house sale fell through – because a mortgage company rejected the ground rent clause – did Darbyshire discover her home had been rendered potentially unsaleable.

When she inquired about buying the freehold, things went from bad to worse. Without her knowledge, Taylor Wimpey had sold the freehold to Adriatic Land at a price understood to be £7,375 for each of the 24 homes on the estate. Neighbours who have since tried to buy the freehold say they have been met with demands of £45,000-£50,000 – a huge amount compared to the £200,000 that some of the smaller homes on the estate currently fetch.

The ground rent company also demands £100 from householders who request a quote to buy the freehold. They also require that any householder wanting to make alterations – such as building a small extension – also pay a fee. “A neighbour wanted to build a small extension and was quoted £3,000 before a brick was laid,” says Darbyshire.

But Taylor Wimpey’s compensation offer has left her deeply frustrated. It offered a “deed of variation … specifically incorporating materially less expensive ground rent review terms”. It is understood the deal will involve the ground rent rising in line with inflation rather than doubling every decade.

Darbyshire says it still leaves her in the clutches of a ground rent company and what she alleges are its “exorbitant charges”. In an open letter to Taylor Wimpey chief executive, Peter Redfern, Darbyshire says: “You seem to believe the only wrongdoing is the introduction of doubling ground rents. The real scandal is the onward sale of ALL freeholds … to investment companies, and the consequences to us … Did you know that, once the freeholds were sold on, that Adriatic would introduce exorbitant charges for alterations and increase the cost of buying the freehold significantly?”

Darbyshire says Taylor Wimpey should be offering homebuyers the chance to buy the freehold at the price originally offered when the estate was built. Her letter adds: “The only acceptable way forwards is for you to reinstate me to the position I would have been in had your sales people, and the solicitor you recommend I use, informed me fully at the point of sale, when I would have purchased my freehold for £5,900.”

Darbyshire is not alone. Sean Greenwood, who Guardian Money featured last November when we first revealed the extent of the ground rent scandal, says the construction giant should refund the £101,000 cost of the apartment his wife bought in Gornal on the edge of Dudley. We highlighted how one apartment had received a “nil valuation” from a mortgage company because of the doubling ground rents.

Greenwood has also written to Redfern, saying: “My wife would still like a full refund. Unfortunately, your most recent offer to change the ground rent review to RPI is unacceptable. We are worried our freeholder maintains the position of power in all negotiations relating to our freehold.

“We are also not willing to wait for the time period it will take to complete the change in the deed. We have been trying to sell for over a year and a combination of the doubling ground rent lease and the collapse of the wall in our car park has meant we cannot sell.”

More than 4,000 people have joined a Facebook group, the National Leasehold Campaign, to protest over ground rent issues and excessive charges, with complaints directed not just at Taylor Wimpey but at other major developers, including Persimmon and Bellway.

Last week, Nationwide told the construction giants it would no longer offer mortgages on new-build properties with short leases or, crucially, where the ground rent is more than 0.1% of the value of the home.

In a statement, Redfern said: “This is about doing what we think is right. We recognise the concerns and difficulties that some of our customers have faced as a result of their doubling leases and we are sorry for the worry this has caused. Although we are under no legal obligation to take action, we want to help our customers.

“We are working hard with the freeholders to convert our customers’ doubling leases to ones that are significantly less expensive … and which resolve concerns around how easy it is to sell or get a mortgage. Taylor Wimpey will cover the cost of converting the leases.

“These leases were put in place between 2007 and 2011 at a time when economic conditions were very different. We stopped using them on sites commenced after 2011.”

The company makes clear that the £130m should not be viewed as compensation, as the sale of the leases was legal, and that it has not been obliged to take action. It suggests that the aim of its Ground Rent Review Assistance Scheme is to address saleability and mortgageability rather than pay compensation.”

https://www.theguardian.com/money/2017/may/13/taylor-wimpey-compensation-leasehold-scandal-victims

Children injured in new- build homes due to dangerous and shoddy workmanship

“Children have been injured in shoddily built new homes, we can reveal.

The youngsters have suffered electric shocks and breathing problems, while one was even crushed by a radiator, after moving in to properties that had not been constructed properly.

The revelations are the latest uncovered by the Daily Mail as part of an investigation into the dire state of many of Britain’s new-build homes.
We have previously reported on leaks, water-logged gardens, missing windows, badly fitted doors, broken toilets and gaps in the guttering.

Many homebuyers have scrimped and saved for years to get on the property ladder.

Today we can reveal that poor workmanship by builders – some of whom are cutting corners in a rush to meet construction targets – is raising safety concerns.

Kate and Kevin Fever, from Tiverton, Devon, saved for years to buy a bigger home for their four children. When they moved to their new £265,000, four-bedroom property in December 2015, there were snagging issues with the downstairs flooring and drainage in the garden. These were fixed within a few weeks.

But, seven months later, a heavy double radiator fell off the wall as their eldest daughter Gemma, then aged ten, walked across the kitchen. Kate, 32, a student midwife, says: ‘When I rushed over and pulled off her sock, I expected just a graze, but it was a bloodbath. I grabbed a tea towel to wrap around her foot and we went straight to A&E.’ Gemma, now 11, needed stitches and a cast on her leg for a ruptured Achilles tendon. Kate and Kevin, 40, reported the incident to their builder Taylor Wimpey.

They claim the firm admitted wrong fixings were used on a number of radiators, which meant they weren’t secured properly to the walls.

The radiators were repaired and the firm contacted other customers they thought could be affected. Gemma also received toys, a £50 Toys R Us gift card and £150.

A spokeswoman for the builder says: ‘Taylor Wimpey has apologised to the Fever family for the distress caused. The health and safety of our customers and their families is our number one priority.’

Paul and Lisa Holland, from Leyland, Lancashire, also bought a four-bedroom property from Taylor Wimpey, which they have lived in since 2010. In November last year, Lisa, 43, and youngest son Kyle, 11, suffered electric shocks after touching a lightswitch.

Paul, 45, an HGV driver, says: ‘It happened when we changed the bulb to an energy saver. The bulb started flashing. My son went to the switch, but he jumped back crying. My wife then tried it and jumped back after also suffering a shock.’ When Paul’s brother tested the plastic switch with a volt meter he found live current leaking. The switch had to be replaced, along with the light. ‘My wife and son are very, very lucky they did not each suffer more serious shocks,’ says Paul.

A Taylor Wimpey spokesman says: ‘The vast majority of our customers tell us they are very satisfied with the quality of their home. ‘However, we recognise that we do sometimes get things wrong, and in those cases we are committed to putting them right as quickly as possible.’

Figures show a staggering 98 per cent of new-build buyers report problems to their builders, according to a new home survey by the National House Building Council and the Home Builders Federation.

After years of saving, Colin and Jessica Nickless bought their first home in September 2015. But since moving into the three-bedroom, terraced new-build in Rainham, near London, the couple and their two children have been plagued by damp and mould. Ellie, five, and Freddie, three, have both been in hospital with breathing difficulties and chest infections.

The couple particularly worry about Ellie as she suffers from cystic fibrosis, which makes her vulnerable to respiratory infections. Colin, 41, a full-time carer for Ellie, says: ‘Our new-build home is making us all ill.
‘We’ve had problems with leaking pipes, damp carpets, water dripping through electrical sockets and light fittings, waste pipes not being connected properly and pouring filthy water into my son’s bedroom.’

A spokeswoman for Circle Housing refused to comment on the case due to an ongoing legal claim.

Philip Waller, a retired construction manager who runs advice website brand-newhomes.co.uk, says: ‘When children are being injured by defective new homes, the Government simply cannot stand on the sidelines.'”

http://www.thisismoney.co.uk/money/mortgageshome/article-4489582/Our-new-build-homes-children-E.html