Following extensive negative press and a campaign by disgruntled leaseholders over the doubling of ground rents every ten years, Taylor Wimpey have started a Ground Rent Review Assistance Scheme.
The scheme is offered on a voluntary basis, which Taylor Wimpey say follows a comprehensive review that looked at concerns raised over the saleability and mortgageability of these properties, and included detailed discussions with the current freeholders, lenders and third-party experts. Homeowners who bought leasehold properties directly from Taylor Wimpey have found that they cannot sell their homes, as mortgage companies will not lend to prospective purchasers owing to the very onerous ground rent.
The Guardian reported that Taylor Wimpey have set aside £130 million for the Ground Rent Review Assistance Scheme, which aims to introduce a deed of variation into the leases. A deed of variation should amend the ground rent clause from one that doubles every ten years to a typical clause whereby it increases in line with the Retail Price Index every 25 years. It seems the intention of Taylor Wimpey is to ensure its customers are able to remortgage their homes and sell them, if required.
However, the process to introduce deeds of variation is unlikely to be straightforward, as the freeholds were sold by Taylor Wimpey to investment companies. They are going to have to agree a deed of variation with investment companies who are unlikely to give up the guaranteed ground rent income without significant compensation.
Leaseholders will not be bound to accept the deed of variation and will need independent legal advice on its implications. These homeowners should also consider if they were correctly advised by their solicitors of the ground rent clause. Lyons Davidson have taken an active interest in these onerous ground rent cases and can provide advice on the Taylor Wimpey Ground Rent Review Assistance Scheme, as well as advice on different options for leaseholders on types of compensation available.