Persimmon homebuyers can withhold money until faults fixed
Contracts will state that 1.5% of property value can be held back until problems resolved.
One of Britain’s biggest housebuilders has responded to criticism about the quality of its homes by allowing homebuyers to withhold an average of £3,600 per home until all faults are fixed.
Persimmon has come under fire for paying out £500m in bonuses to 150 executives and making an annual profit of £1.1bn on the back of the government’s help to buy scheme, while doing little to improve customer care and the quality of its new-build homes.
Many homebuyers have complained about finding numerous defects after moving in, including leaks and cracking windows.
The company said it would offer a homebuyer’s retention scheme, by writing into its contracts that 1.5% of the property value – an average of £3,600 per home – could be withheld by the buyer’s solicitor until any faults identified were resolved. The policy is expected to be fully in place by the end of June.
Roger Devlin, Persimmon’s chair, said: “This is a first among the UK’s large housebuilders and I hope will lead the way in change across the sector. This move, and the urgency with which we will introduce it, is a clear and unambiguous signal of cultural and operational change at Persimmon, putting customer care at the very centre of the business.”
Dave Jenkinson, the company’s new chief executive, said: “Persimmon is listening hard to all of its stakeholders and we hear the message that we need to continue to raise our game in customer care. We are determined that the experience is not overshadowed by teething problems and providing a homebuyer’s retention is an important step towards achieving this.”
He said the builder had also taken steps to improve its accuracy of anticipated moving-in dates. Other improvements include offering maintenance appointments at weekends and out-of-hours opening of customer care departments.
Some critics said the retention sum would not be enough if a kitchen had not been installed properly, or if the bathroom had to be retiled. In the Netherlands, homebuyers can withhold 5% of the home value and deposit it with a notary for three months.
The HomeOwners Alliance has long campaigned for a “2.5% snagging retention”. Its chief executive, Paula Higgins, said: “Whilst we welcome the move by Persimmon let’s hope it isn’t just a PR stunt … We all want to see homes built right first time and let’s hope this is enough of an incentive.”
Jenkinson, the former group managing director, took over from Jeff Fairburn, who left in November after his huge bonus – which made him the UK’s highest-paid chief executive – caused outrage.
The firm’s annual report recently showed that Fairburn was paid nearly £85m in the past two years, more than the £75m he was thought to have received. Jenkinson received £45m.
Persimmon’s huge gains from the help to buy scheme – nearly half its 16,449 home sales last year were made through the taxpayer-funded scheme – have prompted a review by the housing secretary, James Brokenshire.
Persimmon received a three-star rating, out of five, in the 2018 new homes survey from the Home Builders Federation, lagging behind most other major builders. Problems with poor workmanship extend to the upmarket Charles Church brand owned by Persimmon. Disgruntled buyers have set up a Facebook group called Charles Church (Persimmon) Homes From Hell.
The federation welcomed Persimmon’s move, but said: “At a time when the wider construction industry is moving away from retentions it should not be seen as an option for housebuilders generally, and would be extremely detrimental for SMEs in particular.”
The federation is working with the government to introduce a new homes ombudsman to enforce a code of conduct with the power to levy fines.
