The firm will also remove terms which had originally been ground rent doubling clauses but were converted so that the ground rent increased in line with the Retail Prices Index (RPI) - these will also revert to a fixed ground rent. These leaseholds had already been reviewed under TW’s Ground Rent Review Assistance Scheme (GRRAS) launched voluntarily by the firm in 2017.
The housebuilder says it is also making a financial offer, as agreed with the CMA, to third party freeholders of leases that it no longer owns, to enable their leaseholders to get the same terms.
TW chief executive Pete Redfern said:
"Taylor Wimpey has always sought to do the right thing by its customers, shareholders and other stakeholders, and we are pleased that today's voluntary undertakings will draw this issue to a full close, within our original financial provision."
The CMA launched enforcement action against four housebuilders in September 2020 - Countryside and Taylor Wimpey, for using possibly unfair contract terms, and Barratt and Persimmon over the possible mis-selling of leasehold homes. Settlements have now been reached with three of the firms, with the Barratt investigation still ongoing.
Andrea Coscelli, chief executive of the CMA, said: “This is a huge step forward for leaseholders with Taylor Wimpey, who will no longer be subject to doubling ground rents.
“Other developers and freehold investors should now do the right thing for home owners and remove these problematic clauses from their contracts. If they refuse, we stand ready to step in and take further action – through the courts if necessary.”
Taylor Wimpey said the cost of the undertakings falls within the original provision it made in 2017 and stressed that by entering into these undertakings there is no finding that the firm has infringed UK consumer law.
“The CMA acknowledges that the GRRAS scheme has helped over 5,400 customers convert their ten-year doubling ground rent leases to an industry standard RPI-based structure, at Taylor Wimpey's cost, and has addressed the concerns raised regarding mortgageability or saleability of these properties.”
