Taylor Wimpey on slide as it pays price of freehold scandal

Taylor Wimpey sagged on Wednesday as the housebuilder’s results were hit by the fallout of a scandal which left homeowners saddled with doubling ground rents.

The company sold on the freeholds of the properties with the onerous clauses to investors, leaving buyers facing bills of potentially tens of thousands of pounds with ground rents doubling every decade.

It has made “good progress” in negotiating with the freeholders but made a £130 million provision for likely compensation, leaving profit before tax down 6% to £555.3 million last year.

Shares slid 10.75p to 183p.

Although the builder said it made a “good start” to 2018 it is now trading against a backdrop of rising interest rates after the Bank of England’s first move for a decade in November.

But chief executive Pete Redfern also said the central London market, which has dropped 7% since its peak at the end of 2015, was “over the worst” and stable.

“Our view remains that there are a lot of people who would like to buy in central London, not just international buyers but domestic buyers too.”