“Help to buy” – or help to rip off?

“Britain’s biggest housebuilders have doubled the average profits they make from each home since the Help to Buy scheme was launched.

Analysis by The Times reveals that the top five builders in Britain are making an average profit of £57,000 on each house they sell, compared with a mean average of about £29,000 in 2007.

Barratt, the biggest builder, is making almost double the amount of profit compared with ten years ago but is building only 411 more homes. Another builder, Bellway, is making more than £58,000 profit a house compared with a little more than £30,000 in 2007 but is building 2,000 fewer homes.

At the time of its launch in 2013, it was hoped the scheme would stimulate house-building. When it was extended in 2014, Mark Clare, then chief executive of Barratt, said: “Britain urgently needs more homes and by setting out a longer-term framework for Help to Buy this announcement will enable the industry to deliver just that.” Yet figures show that the total number of new houses delivered has barely changed since the introduction of the scheme.

The profits last year have been compared with 2007 because this was the last full year that housebuilders were at their peak before the financial crash. Annual pre-tax profits were divided by the number of homes built in each year to reach a “profit per house” figure.

Britain is facing its worst housing crisis in generations, with ownership at a 30-year low and a record 1.8 million families with children renting privately.

Housebuilders were quick to point out that underlying growth will have boosted profits, with house prices having risen by 23 per cent across the UK since 2007. They also noted that they were paying huge amounts back in debt each year at high interest rates before the financial crash, compared with today, when they have millions in cash at the end of each year.

However, analysts believe that a large driver of profits is the government’s Help to Buy scheme, which supports about 40 per cent of housebuilders’ sales. Robin Hardy, an analyst at Shore Capital, believes that housebuilders would be making £22,000 less in profit on each house built for first-time buyers if Help to Buy was not in place. “We reckon that homes sold through Help to Buy are 53 per cent higher than in June 2013, whereas house price figures from Land Registry or Nationwide suggest that across all first homes it’s more like 19 per cent,” he said. “That suggests that someone is gaming the system.”

Neal Hudson, a housing expert at Resi Analysts, said that shareholders had become “the main priority” for housebuilders since the financial crash. “The over-arching factor has been big pressure from the City,” he said. “The priority for them is profit margin not the number of homes built.”

Persimmon, Britain’s second-largest housebuilder, made an average profit of just over £60,000 on each house it built in 2017. In 2007 the figure was £36,787. It built only 138 more homes.

The housebuilder made pre-tax profits of £966 million in 2017 and has a war chest in net cash of £1.3 billion. Jeff Fairburn, its chief executive, was paid £75 million in a bonus scheme last year, which was more than the highest paid banking executives on Wall Street.

Lord Best, vice-chairman of the all-party parliamentary group on housing, said: “These bumper profits come at a time of growing recognition of the catalogue of failings of major housebuilders: poor design, miserable space standards, defective workmanship, delaying development to keep prices high . . . and exploiting a loophole in the planning process to renege on their obligations to include affordable homes in their developments.”

However, developers said the type of product they build has changed, with far fewer flats and a much tighter control over what type of land they buy.

A Home Builders Federation spokesman said: “House building is cyclical. After the financial downturn companies posted big losses and had to make huge writedowns on the value of their land. Many companies disappeared. Since 2013 output has increased by 74 per cent, an increase that as well as providing desperately needed homes has given the economy a huge boost.”

Source: The Times (pay wall)

Barclays refuses mortgages on controversial Taylor Wimpey new homes – and Taylor Wimpey share price INCREASES!

“Scandal hit Taylor Wimpey has suffered a blow after Barclays refused to offer mortgages at a flagship development because of fears over leaseholds.

The housebuilder is seeking buyers for its Chobham Manor site in the Queen Elizabeth Olympic Park in London but the properties come with complicated leases.

Barclays told one family looking at a property they could not have a mortgage because of a clause which might mean the lease was terminated if one of Taylor Wimpey’s subsidiaries went bust.

If that happened the bank would be unable to get its money back.

Taylor Wimpey has pledged to fix the problem but would not say how many properties were affected at the site, where prices are as high as £1million.

The firm has been criticised for selling leasehold homes with unaffordable ground rents.

Shares rose 1.1% or 1.85p to 170.65p.”

http://www.thisismoney.co.uk/money/markets/article-6108205/Taylor-Wimpey-hit-leasehold-woes.html

Do you have a Taylor Wimpey house? Check your mirrors!

“A house builder is checking wardrobe mirrors at a new development after one fell and ‘exploded’ near to where a baby normally sleeps.

Jennie and Joe Adams claim full-length wardrobe mirrors were ‘stuck on with tape’ at their new home in Gorebridge, Midlothian.

As a result, they say one of the mirrors fell off and crashed to the floor with a massive bang, leaving shards of glass everywhere. …

A spokeswoman for Taylor Wimpey East Scotland said: ‘We are very sorry to learn about the situation at our Harvieston Park development, and we have carried out a full investigation in conjunction with our wardrobe door installer to understand the circumstances.

‘We have apologised to the family involved and we have offered our assistance to resolve this matter for them.

‘As an additional precaution, and to provide comfort to other homeowners living at the development, we will conduct additional checks on similarly fitted mirrored wardrobe doors that could be affected to make sure this issue does not happen again.’

http://www.dailymail.co.uk/news/article-6071415/Taylor-Wimpey-forced-check-mirrors-new-housing-estate-failure.html

Taylor Wimpey, Archant, EDDC and red dust in Littleham, Exmouth : “fake news”?

Below is information from an Exmouth resident sent to an Archant local reporter regarding development at Littleham, Exmouth, the “red dust” it is creating and its effect on a large number of frustrated residents.

The resident has received no reply to either email and the newspaper has not balanced its original mild article to reflect the information in these emails:

11 August 2018:

Ms Brainwood [Archant reporter who wrote original article]:

Further to my email from last week I write to inform you of the following. It has been noted by the way that you did not pay me the courtesy of a reply.

Local residents are quite rightly annoyed that your article gave false impressions.

You reported the following :

1. The only residents to be affected were two elderly people in Buckingham Close.
2. The only area affected was indeed Buckingham Close.
3. Taylor Wimpey were doing everything they could to minimise the red dust site vehicles generated.
4. EDDC were happy that the red dust was “ within limits “.
5. Environmental Health Officers from EDDC were quite happy with the overall situation.

The real situation could not be further from the truth.

If you had asked local residents they would have informed you the red dust was experienced in Littleham Road, Midway, The Crescent, Jarvis Close, The Broadway, Douglas Road and Cranford Road just to name a few areas.

Local resident who I have spoken to agree your article is at best sloppy journalism and at worst, fake news.

I read on the Exmouth Journal website your Group Editor Philip Griffin tells us the paper is “ respected for it`s balanced reporting “. We all had a good laugh at that.

For you information the cycle path in Jarvis Close north of Plumb Park is being currently dug up by South West Water to lay pipes. The work will last for 5 weeks. More excessive noise, more disruption and even more dust just a couple of metres from residences in Littleham Road.

Finally, it is your prerogative not to reply to my emails, it is our prerogative not to purchase your paper. “

and the resident’s earlier email to which the resident also had no reply:

“2 August 2018

To: laura.brainwood@archant.co.uk
Subject: Red dust causes misery for residents near Plumb Park development

I would like to make you aware of a few facts regarding the current red dust problem that you reported on in the 1st August 2018 edition of the Exmouth Journal.

“ Taylor Wimpey have taken measures to reduce the impact “. This is not correct.

When I have contacted their Exeter call centre ( 01392 442617 ) they say dust suppression is taking place, but it is not. We are told a water bowser “ damp down” every day. As the site is visible from my bedroom window in Littleham Road, 30 meters from the north fence, I can inform you it never takes place. We are also told a street sweeper is used to suppress the dust. We have never seen the vehicle.

A resident who lives in Jarvis Close (his wife has a very serious case of COPD), confronted the Site Manger face to face recently and was told “damping down“ takes place in certain areas every 20 minutes. This is a lie.

I have contacted Environmental Health to complain about the red dust. I am not the only Littleham Road resident to have done this.

Alice Gill EHO did call back to inform me that Taylor Wimpy is taking action to reduce the dust. She is telling me what Taylor Wimpey is telling her. It is just not happening. Recent emails informing them again, that there is still a big problem have been ignored.

Food has to be covered to stop contamination from the dust in the kitchen. As windows are left open due to the warm weather we even have dust on tooth brushes in the bathroom. It has permeated into closed cupboards. Yes. It is inside the house!!!

In the meantime elderly resident who have COPD have to inhale red dust, along with everybody else, just because Taylor Wimpey can`t be bothered to do anything.

EDDC Development Management Committee was informed in June 2013 by many local residents that this development would blight the lives of local people. They were not interested.

Perhaps your readers would like to know a few facts regarding this issue, plus the current disinterest.”

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.