Tag Archives: bellway

Commons Debate Leasehold New Houses Scandal

“The PPI of the house building Industry”

The APPG for Leasehold and Commonhold Reform managed to secure a debate in the commons chamber on Tuesday 20th December 2016 to discuss the leasehold new houses scandal. With 53 APPG members, it was surprising that only 13 MPs and Housing Minister Gavin Barwell attended initially. I previously highlighted the scandal of leasehold new houses on 7 November 2016 entitled “The next mis-selling scandal” This phrase apparently being picked up, with the Labour MP for Ellesmere Port and Neston, Justin Madders calling the practice during the debate as “the PPI of the house building Industry”. See also Never buy a leasehold new house 28 October 2016

leasehold new houses scandal

Leasehold new houses scandal

LeaseholdAn analysis by the excellent campaign group  Leasehold Knowledge Partnership (LKP) in November 2016, revealed that 8,775 new-build leasehold houses totalling nearly £2billion were sold in England and Wales last year. In all around 45,000 new houses have been registered as leasehold. Many of these bought with help from taxpayers’ through the Help to Buy scheme. In most cases, the housebuilder sells the freehold after a couple of years to a private company, which can then demand extortionate fees from homebuyers.

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Builders shares crash as Britain votes to leave the EU

It would appear that the house builders’ share price rise since the financial crash of 2008, has been built on the same dodgy foundations as some of their houses are. A business model built on selling sub-standard houses to sub-prime borrowers.

This was illustrated during the first two days of trading following the UK’s historic vote leave the EU. Worst hit in the initial market panic were Banks and shares in the listed house builders. Despite this, some ever-greedy directors used the Friday crash to buy more shares on the cheap, known as “catching a falling knife” and promptly lost another 15%! Taylor Wimpey Non-Exec director Dame Kate Barker, 59, who produced the Barker Review on housing supply in 2004 – which resulted in the industry setting up the HBF Customer Satisfaction Survey two years later, but has failed to have any impact on improving either supply or quality – bought 20,000 Taylor Wimpey shares for £26,953 but the shares closed down 15% leaving her with a paper loss of £3,800.

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HBF Survey Housebuilder Star Rating 2015

Barratt HBF Star rating

Highest Quality Housebuilder? Not exactly!

Before 2011, the star rating of  housebuilder’s was also based on the question: “Taking everything into account, overall how satisfied or dissatisfied are you with the quality of your home?”  over the last three years the star rating awarded to housebuilders is derived from the responses to just one Yes or No survey question:“Would you recommend your builder to a friend?”

Of the bigger housebuilders only Barratt, Redrow, McCarthy and Stone and Miller maintained their 5 star rating from last year.  Taylor Wimpey, Bellway, Bloor, Crest, and Churchill Retirement Living, all lost their five star rating. Persimmon, Bovis and Avant also lost a star and are now the only housebuilders rated just 3 stars in the latest HBF National New Home Customer Satisfaction Survey.  Just how bad are their new homes?

So why are standards getting worse and who is to blame?
Guilty Housebuilder CEOsThese men are all guilty – guilty of building and handing over new homes late, not fully completed, with defects and failing to provide the required level of customer care to ensure that all their buyer’s problems are rectified quickly and effectively. Britain’s least wanted! – Lacking in star quality?  They may have stars in their eyes but now have fewer on their site flags!

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A personal plea to Construction Minister Nick Boles

Dear Mr Boles,
You recently said that you regard house builders as the “unacceptable face of capitalism” after seeing first hand the shoddy workmanship of two house builders in your own constituency, adding housebuilders   “need to design beautiful places that respect the local environment, and they need to build houses to a high quality which will stand the test of time. If they don’t, I cannot and will not defend them.”

I have been campaigning for 8 years via my website www.brand-newhomes.co.uk and my blog www.new-home.blog.co.uk to make the public more aware of the poor quality and design of new homes and housebuilders’ poor and often non-existent after sales service.

Your government has done more for the house building industry than any other government and continues to be the “gift that keeps on giving”. Only this week, stamp duty was reformed. Whilst this is good news for the majority UK house buyers and very welcome, it is also particularly good news for housebuilders, now able to increase their prices even more now that stamp duty threshold ‘chokes’ have been removed. This follows the 20% discount on new homes for first-time buyers under 40, in addition to: NewBuy, FirstBuy and the biggest taxpayer subsidy of all: “Help to Buy” which has ‘helped’ house builders to record profit rises by increasing average selling prices by 20%. Furthermore, your government has relaxed planning rules, requirements to build affordable housing,  Section 106 obligations, Community Infrastructure Levy and the zero-carbon homes policy. There has never been a better time to be a major British home builder.  Ask, and ye shall receive!

If it was not for the dogged determination of Kirsty Burton and her neighbours, perhaps you would never have witnessed first hand the dire quality standards at a Persimmon estate in your constituency. You personally also discovered the complete contempt housebuilders have for anyone calling them to task over the quality of their homes and their indifference to dealing with defects in their customer’s homes. Quite frankly, if a government minister is unable to get a satisfactory response from Persimmon CEO Jeff Fairburn, what chance have the buyers of this company’s new homes?

But please do not make the mistake that this is a new phenomenon,  restricted to just one or two housebuilders on a handful of developments. It is a national epidemic!

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Are house builder CEOs fit for purpose?

Is the size, design and more importantly, build quality of new homes getting any better? Judging by the number of complaints they receive and various online comments the answer is a resounding NO! Only this week a Bellway Homes buyer was forced to move out of his house because it was declared structurally unsound after an incorrect (weak) mortar had been used. A Taylor Wimpey buyer could not move into his new home for TWO MONTHS because of the extent of snagging defects included potentially dangerous electrical installation. According to the unfortunate new home buyer, a Taylor Wimpey regional director even told him that “we’re here to deliver profit for our shareholders” adding: “we don’t build perfect houses”.

Whilst planning and building regulations stipulate minimum standards, it would appear that no house builder is prepared to go beyond the absolute minimum quality standards. When a new home buyer complains they are often referred to the NHBC’s booklet “A Consistent Approach To Finishes” and told that it is “within tolerance” The author has written to Persimmon’s Jeff Fairburn, and Taylor Wimpey’s Pete Redfern to ask what measures they are personally going implement improve the quality of their product. Neither has replied!

So with CEOs apparently only driven by profit and share prices, we thought it would be worth a look at examining whether those who are in charge of Britain’s largest plc house builders are in fact, fit for purpose. It can be seen that with one exception, they have not had a University education. In addition, only three have any experience of actually managing a building site, two of these actually started their own companies!

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