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Highlights
- UK based housebuilding company Taylor Wimpey has agreed to remove its costly leasehold terms following an investigation from the CMA.
- Some of the other companies on which the CMA had launched enforcement action include Barratt Developments, Countryside and Persimmon.
UK based housebuilding company Taylor Wimpey (LON: TW.) on Wednesday agreed to remove its costly leasehold terms following an investigation from UK’s competition body, Competition and Markets Authority (CMA).
Taylor Wimpey’s above-mentioned terms included the doubling of ground rent charges every 10 years. The CMA has been investigating the contractual expenses of Taylor Wimpey and other housebuilders.
The increase in costs prohibited some owners from either selling or mortgaging their homes while simultaneously putting homeowner’s property rights at risk if they couldn’t keep up with their ground rent payments.
Taylor Wimpey thus committed to the CMA, on a voluntary basis, to remove such terms from their contracts.
The FTSE 100 index listed company’s shares rose about 0.77 per cent to trade at GBX 171.05 on Wednesday early trading, following the news.
Some of the other property development companies which the CMA had launched enforcement action last year in September include Barratt Developments (LON:BDEV), Countryside and Persimmon Homes.
Let us explore the investment prospects of some of these other FTSE 100 index listed property developers and see how they reacted to the news:
- Barratt Developments plc (LON: BDEV)
Barratt Developments is among one of the biggest residential housebuilding firms in the UK.
The group’s net private reservations per average week were at 281, between 1 July and 10 October 2021. In comparison, its FY 2021 figure, during the period, was at 288.
During the reported period, group’s net private reservations per active outlet per average week was at 0.85, slightly lower than 0.87 reported in the same period previous year.
Image source: Refinitiv
Barratt Developments shares were at GBX 730.60, higher by 0.80 per cent as of Wednesday, 22 December at 12:01 hrs BST, and the company’s market capitalisation was at £7,410.81 million.
Comparatively, the FTSE 100 index was at 7,303.31, up by 0.08 per cent. The company has given shareholders a return of 14.99 per cent in the last one year as of date.
- Persimmon PLC (LON: PSN)
Persimmon is a UK based home building group. For the trading period between 1 July 2021 to 8 November, the company’s average private new home sales reservation rate (on a per-site basis) was about 16 per cent higher than its pre-pandemic levels in 2019.
During the period, the legal completions increased by 10 per cent in 2021, from 13,575 legal completions in the year before.
Image source: Refinitiv
Persimmon shares were at GBX 2,790.00, up by 1.31 per cent as of Wednesday, 22 December at 12:45 hrs BST, and the company’s market capitalisation was at £ 8,788.05 million.
The company has given its shareholders a return of 4.34 per cent in the last one year as of date.
