REG - Taylor Wimpey PLC - Agreement of voluntary undertakings with the CMA

Taylor WimpeyAnnouncement

22/12/2021 07:05

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RNS Number : 4143W  Taylor Wimpey PLC  22 December 2021

22 December 2021

Taylor Wimpey plc

Agreement of voluntary undertakings with the CMA

 

Taylor Wimpey plc today announces that the CMA's investigation into the
historical sale of leasehold properties with doubling ground rent clauses by
the company is closed, following the agreement of voluntary undertakings. The
cost of today's undertakings falls within the original provision Taylor Wimpey
made in 2017. By entering into these undertakings there is no finding that
Taylor Wimpey has infringed UK consumer law.

 

The undertakings, which build on the company's Ground Rent Review Assistance
Scheme (GRRAS scheme) - which was launched voluntarily and proactively in 2017
- mean that all leaseholders of Taylor Wimpey-owned ten-year doubling ground
rent leases, or those that have already gone through our GRRAS scheme and
converted their Taylor Wimpey-owned lease to an RPI-based structure, will
revert to a fixed ground rent. Taylor Wimpey is making a financial offer, as
agreed with the CMA, to third party freeholders of leases that Taylor Wimpey
no longer owns, to enable their leaseholders to do the same.

 

Pete Redfern, CEO, 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 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.

 

Taylor Wimpey has established a dedicated page on our website which can be
found at
www.taylorwimpey.co.uk/get-in-touch/cma-leasehold-investigation-closure
(https://www.taylorwimpey.co.uk/get-in-touch/cma-leasehold-investigation-closure)
and will proactively contact all customers with historic doubling ground rent
leases and freeholders who own historic doubling ground rent leases in early
2022.

 

 

ENDS

 

 

 

For further information please contact:

 

Taylor Wimpey plc

 

Alice Black, Group General Counsel and Company Secretary      Tel: +44 (0)
1494 885616

 

Andrew McGeary, Investor Relations
 
Tel: +44 (0) 1494 885654

 

Finsbury Glover Hering

 

Faeth Birch / Anjali Unnikrishnan / James Gray:
                          TaylorWimpey@Finsbury.com
(mailto:TaylorWimpey@Finsbury.com)

 

 

Notes to editors:

Taylor Wimpey Ground Rent Review Assistance Scheme

Taylor Wimpey took the decision to stop selling leases containing 10‐year
doubling ground rent clauses on new developments from 1 January 2012. In April
2017, following a detailed review, Taylor Wimpey launched a voluntary help
scheme (the Taylor Wimpey Ground Rent Review Assistance Scheme ‐ GRRAS) that
was specifically aimed at addressing concerns raised by some customers
regarding affordability and how easy it is to sell or get a mortgage on
properties with a ten‐year doubling ground rent clause.

Under GRRAS, Taylor Wimpey covered the cost of converting customers' lease
terms into an industry standard RPI-based lease, if they chose to do so.
Taylor Wimpey set aside funding of £130 million to cover the cost of these
lease conversions.

Regarding today's announced undertakings

Taylor Wimpey has worked with the CMA constructively throughout their
investigation and our desire to fully close the issue for the benefit of our
customers and other stakeholders means that we have given the following
voluntary undertakings to the CMA:

 

Where Taylor Wimpey is the freeholder:

 

·      With immediate effect, Taylor Wimpey will not collect any ground
rent above the initial level from leaseholders whose leases originally
contained ten-year doubling ground rent clauses (whether or not their lease
has been converted to RPI through the GRRAS scheme).

 

·      For any leaseholder whose lease still contains a ten-year
doubling ground rent clause, Taylor Wimpey will offer to formally vary these
leases to remove the doubling clause, so that the leaseholder will pay only
the initial ground rent, which will remain fixed.

 

·      For any leaseholder that has already gone through the GRRAS
scheme and converted their doubling lease to an RPI-based structure, Taylor
Wimpey will offer to formally vary their lease to remove the RPI escalation
mechanism, so that the leaseholder will pay only the initial ground rent,
which will remain fixed.

 

The above will apply whether the leaseholder purchased their home from Taylor
Wimpey directly, or from a previous owner.

 

Where Taylor Wimpey is not the freeholder:

 

·      For any remaining ten-year doubling leases, Taylor Wimpey will
make an offer to the owners of the freeholds, which has been agreed by the
CMA, for them to remove the doubling ground rent clause from each lease and
revert to the initial ground rent, which will remain fixed.

 

·      For any leaseholder that has gone through the GRRAS scheme and
converted their doubling lease to an RPI-based structure, Taylor Wimpey will
make an offer to the owners of the freeholds, which has been agreed by the
CMA, for them to formally vary their lease to remove the RPI escalation
mechanism, so that the leaseholder will pay only the initial ground rent,
which will remain fixed.

 

As noted above, the cost of today's undertakings falls within the original
provision Taylor Wimpey made in 2017.

 

For further information, please visit the Group's website:
www.taylorwimpey.co.uk (http://www.taylorwimpey.co.uk)

 

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