House-building giant Taylor Wimpey has seen full-year profits dented after having to fork out £130m because of a leasehold scandal.
Taylor, the UK’s third biggest house-builder, saw bottom-line annual profit fall 5.8 per cent to £555.3m. Pre-tax profit fell 6.9 per cent to £682m in the period.
It set aside £130m to help customers trapped in onerous leasehold contracts drawn up by the house builder.
Leaseholders were forced to stomach ground rents that doubled every 10 years and the freeholds to their houses were able to be sold to third-party private firms, making many homes unsaleable.
Taylor said it had secured agreements with 90 per cent of freeholders to allow affected customers to convert to an inflation-based leasehold scheme and was making “good progress” on agreements with the remaining freeholders.
However, the group said Britain’s property market remains solid despite wider economic uncertainty and hailed an otherwise “strong year”.
Boss Pete Redfern said: “2017 was another strong year for Taylor Wimpey and we enter 2018 in a good position with positive forward momentum.
“We have been encouraged by early trading patterns at the start to the year and despite some wider macroeconomic uncertainty, consumer confidence remains robust and market fundamentals are solid.”
Total revenue grew 7.9 per cent to £3.96bn as it reported a 4.6 per cent rise in completions to 14,842 over 2017.
Stripping out the leasehold provision, pre-tax profits came in at £812m for the year, up from £733.5m.
Average prices on private sales lifted 3 per cent to £296,000 in the UK.
The bullish remarks from Mr Redfern come in spite of mounting worries over a housing market slowdown after a run of recent downbeat reports as falling wages and Brexit fears weigh on the sector.