Housebuilders got billions in taxpayer cash - they must end all their shoddy practices

If ever a company needed to change its corporate strapline it’s probably Taylor Wimpey. “We're here to support you, every step of the way”, the housebuilder proclaims but as ever with these sort of empty slogans the proof is in the pudding. 

So how has the FTSE-100 constituent sought to live up to such a lofty assertion? By legging over thousands of homeowners with extortionate ground rents that doubled every 10 to 15 years.

To be fair to Taylor Wimpey, it wasn’t the only one at it, and the company has voluntarily agreed to end the shabby practice but only after some fairly sharp poking from the Competition and Markets Authority in the form of a formal investigation lasting more than a year. 

Countryside and Aviva have also settled with the watchdog, while an investigation into Barratt Homes is ongoing.

Leasehold home abuse is a mis-selling scandal that some campaigners have compared to the payment protection insurance racket peddled by the banking industry. Although it doesn’t compare in terms of scale - 100,000 people are thought to have been exploited this way compared to the tens of millions caught up in PPI - it is no less outrageous.

In some ways, the whole affair is even more disgraceful because of the damage inflicted on customers. As if it wasn’t bad enough having to live in one of Taylor Wimpey’s soulless cardboard cut-out houses, many have been stuck in homes that they have been unable to sell or obtain a mortgage on. Others were charged eye-watering sums to buy the freehold for their home at a later date.

CMA boss Andrea Coscelli likens it to “people being trapped in their homes” many of whom would have been first-time buyers. Buying your first home is supposed to be a happy occasion, a landmark moment in adulthood that you will always cherish, having saved for years in your twenties to get on the ladder. 

But it is becoming increasingly difficult to do so, as house prices set new highs on a monthly basis. So to have a nationwide housebuilder that was generating more than £4bn a year in turnover before the pandemic stacked the odds against buyers even more unfairly is particularly egregious. 

It is a power imbalance that individual homeowners are unable to fight back against without joining forces and forming courageous campaign groups, and even then the road to justice can be long, painful, and expensive. 

The behaviour of the big housebuilders is even more deplorable when you consider the taxpayer support that has been lavished on the industry over the last decade. It’s not as if building modern affordable homes is a complicated business. 

Yet, fuelled primarily by the Treasury’s Help to Buy scheme, profits and share prices have gone through the roof, taking executive pay packets with it. 

Housebuilders then got another unnecessary boost during the pandemic from the Chancellor’s stamp duty holiday and the mortgage guarantee scheme, which put a rocket-booster under the market.

While other major industries such as hospitality, travel, and the arts have struggled to stay afloat thanks to woefully inadequate government aid, the pandemic has been a boon for the housebuilding sector. 

House prices are growing at their fastest pace in 15 years with the average cost hitting a record £273,000 at the end of November, an 8.2pc rise in the space of just 12 months. 

The CMA will consider this a sizable victory, particularly after some high profile gaffs but this is a scandal that should never have been allowed to happen. Nor should anyone kid themselves that just because one shoddy practice has ended, that others aren’t happening in plain sight. 

Customers of new-builds are sadly used to second-rate standards, risible customer service, and in the case of the Grenfell cladding scandal, dangerous workmanship. It is an industry crying out for reform from top to bottom.