CMA Leasehold Investigation Closure

On 22 December 2021, Taylor Wimpey plc announced that the CMA’s investigation into the historical sale of leasehold properties with doubling ground rent clauses by the company closed, following the agreement of voluntary undertakings.

Taylor Wimpey worked with the CMA constructively throughout their investigation with the desire to fully close the issue for the benefit of our customers and affected leaseholders.  Building on the company’s Ground Rent Review Assistance Scheme (GRRAS scheme) – which was launched voluntarily and proactively in 2017, we gave voluntary undertakings to the CMA. The CMA acknowledged that the GRRAS scheme 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 addressed the concerns raised regarding mortgageability or saleability of these properties.  
 
The undertakings meant that Taylor Wimpey took the following additional steps in respect of leases that contained a ten-year doubling ground rent clause when originally issued by Taylor Wimpey.
 
Where Taylor Wimpey is the freeholder:

• With effect from 22 December 2021, Taylor Wimpey will not collect any ground rent (above the initial ground rent) from leaseholders whose leases originally contained ten-year doubling clauses (whether or not their lease has already 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 their lease to remove the doubling ground rent 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 ground rent clause 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 as set out in the lease, which will remain fixed.

The above will apply whether the leaseholder purchased their home from Taylor Wimpey directly, or from a previous owner.
 
In February 2022 and January 2023 Taylor Wimpey proactively contacted all its leaseholders with historic ten-year doubling ground rent leases to set out the offer and next steps. All Taylor Wimpey leaseholders will be reminded again during February 2024.

Where Taylor Wimpey is not the freeholder:

• For any remaining ten-year doubling leases, Taylor Wimpey made 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 ground rent lease to an RPI-based structure, Taylor Wimpey made 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.

Taylor Wimpey proactively contacted all its freeholders who own historic ten-year doubling ground rent leases during January 2022 to set out the offer and next steps. We are pleased to confirm that the vast majority of freeholders accepted Taylor Wimpey’s offer, and steps are being taken to facilitate conversion of relevant leases to a fixed ground rent.  

For further information and guidance, please see the Frequently Asked Questions (FAQ) below.

Where Taylor Wimpey is the freeholder:

Where Taylor Wimpey is not freeholder: