Hobson: My Favourite UK Bank is...

THE WEEK: Morningstar columnist Rodney Hobson is unimpressed with Taylor Wimpey and reveals his favourite UK banking stock

Rodney Hobson 4 August, 2017 | 12:00PM
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If companies object to state intervention in how they conduct business, then they really must learn that grossly unfair sharp practice is unacceptable, even if they fall short of outright fraud. The banks have already discovered that their disgraceful behaviour rebounds at great cost in compensation as well as onerous regulation. Now housebuilders are facing the same lesson.

Taylor Wimpey (TW.) has set aside £130 million to cover the cost of its leasehold outrage. It sold houses leasehold with terms that were onerous but not obviously so, then sold the freehold on, so buyers were left at the mercy of unknown third parties. Anyone who was not taught multiplication tables at primary school – which pretty much includes two generations now – has little or no grasp of how rapidly doubling up ground rent produces massive annual sums.

TW has finally had to face the choice of compensating its victims or becoming known as a builder whose homes cannot be resold. It is not the first. The sooner the government makes good on its threat to outlaw the sale of homes on leasehold terms the better.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
BAE Systems PLC560.60 GBX1.30Rating
Barclays PLC172.76 GBX2.00Rating
HSBC Holdings PLC396.60 GBX-1.66Rating
Lloyds Banking Group PLC46.78 GBX0.56Rating
NatWest Group PLC201.50 GBX-0.05Rating
Standard Chartered PLC431.80 GBX-0.12Rating
Taylor Wimpey PLC165.30 GBX0.33

About Author

Rodney Hobson

Rodney Hobson  is a columnist for Morningstar.co.uk and author of several investing books, including The Dividend Investor and How to Build a Share Portfolio.

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