“The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those that have too little.” …Franklin D Roosevelt
I was disgusted when I first reported on Persimmon Long Term Incentive Plan (LTIP) in April 2013 – I still am.
This week, Persimmon’s LTIP bonuses have come into further criticism and were the subject of universal widespread condemnation. Apart from their PR company spokesperson, no one can possibly agree that bonuses on this scale can be justified, even if there has been exceptional performance. Investment giant, Royal London Asset Management said Persimmon was being insensitive when many were suffering from their failure of house builders to construct enough homes, Mike Fox went further saying the payments were “too high in all circumstances”. The LTIP payments have been critically publicised this week in The Guardian, Daily Mail, Telegraph, Independent and on the BBC website.
Beleaguered Persimmon buyers across the country must have recoiled in disgust when they learned of the scale of the projected payments that 150 Persimmon executives will trouser over the next five years if, as seems likely, the twice extended, Help to Buy gravy train keeps on running all the way to house builders’ bank accounts until 2021.
Persimmon issue counter claim to recover cost of repairing new house in Sunderland.
Persimmon Homes, rated just three stars by their own customers in the industry’s “satisfaction survey,” appear go out of their way to be confrontational and intransigent to any customers who take issue with the builder. The phrase “the Customer is always right” isnt even on their radar if this story from the North East Evening Chronicle is anything to go by.
An unhappy Vince Wareham outside his Persimmon new home at Alexander Park in Sunderland.
New homebuyer Vince Wareham told the Chronicle about his shock when he learned Persimmon were taking legal action against him in an £8,000 counter claim, after he decided to take the house builder to court, claiming £2,950 in compensation for remedial works carried out on his new home.
Help to Buy helps trigger large bonus windfalls for housebuilder CEOs and senior directors.
On 17 March 2014 shares in the housebuilders surged up to 6% as George Osborne announced he was extending the Help to Buy Equity Share on new homes, until 2020. The announcement came less than a year after Help to Buy first became available. It had originally been due to end next year! However the second part of Help to Buy, the UK-wide mortgage guarantee scheme, is still due to finish at the end of December 2016.
At the time the chancellor announced that an extra £6bn would be put into the English scheme, allowing a further 120,000 new homes to be built. However there is little evidence that the housebuilders are responding by building more homes despite Help to Buy “helping” them to around 35% of their sales last year.
Following Persimmon being featured on BBC Watchdog and in my view let off lightly, last month, the BBC Watchdog office has been contacted by hundreds of disgruntled Persimmon new home buyers from as many as sixty different developments across the country with their experiences of unfinished homes, defects and poor customer care. See the Persimmon BBC Watchdog clip here
Homes not finished
On couple featured on last nights programme were Charlotte and Ashley Read who bought a new home on Persimmon’s Waters Edge estate in Cheshire. When they were handed the keys to their brand new £190,000 new home they found:
“it looked like a half finished house. Everything was a mess there were things incomplete, no rainwater pipes” causing damp and mould inside our home. I couldn’t believe we paid money for this, it was disgusting”
It took Persimmon THREE MONTHS to finally “sort everything out”
Other new home buyers also found Persimmon’s contractors still working in their homes when they came to move in – “the house wasn’t finished but Persimmon had declared it to be ready and taken their money anyway.”
The CML final certification was brought in to prevent housebuilders handing over unfinished new homes. The Council for Mortgage Lenders initiative requires this completion certificate, along with confirmation that the new home warranty is in place, before they release the mortgage funds. So how and why can a new home be signed off by a supposedly independent Building Inspector, quite often the NHBC, when clearly it anything but complete? How can the “inspectors,” the site manager and everyone else, miss something as obvious and quick and easy to fit as no rainwater downpipes?
The CML final inspection should to be made 14 days before the legal completion date. This is to give the solicitors and mortgage provider a minimum “14 days notice” to arrange for the funds and also would provide new home buyers with an opportunity to properly inspect their “finished home.” How is this notice period being avoided by Persimmon (and other housebuilders) especially in the weeks and days before their financial year end cut-off date?
“Why choose Persimmon?” it says their website. Why indeed.
It remains a complete mystery to me why anyone in his or her right mind would actually choose to buy a new home from Persimmon. Especially when they can choose to buy from any five-star rated housebuilder with a history of winning NHBC awards for quality. Or at least avoid the worst of the housebuilders – those featured on national television programmes and in newspaper columns for both the poor standard of the homes they build and the lack of any resemblance of customer care when homebuyers discover the inevitable snags and defects, missed by the so called professionals employed by housebuilders such as Persimmon.
I am amazed that year after year, naïve young homebuyers get taken in by Persimmon’s marketing spin, some ending up in tears on national television with their fully preventable tales of woe. Preventable, because their homes could have been built with greater care. Preventable, because they could be built more slowly and all stages thoroughly checked and inspected by Persimmon site management, the warranty provider and building control inspectors. Preventable, because the government could and should introduce new legislation to protect all new homebuyers and provide an independent means of dispute resolution in the form of an Ombudsman for New Homes, rather than rely on a Consumer Code for Home Builders, set up and managed by housebuilders and other interested parties.
Talk is cheap.
All housebuilders make exaggerated claims about the homes they build and the “service” they offer to customers. Only in housebuilding could 93% of buyers experience a problem. Only in housebuilding would 47% of buyers be expecting the number of defects and problems they get. Yet they still buy new homes, year after year. Maybe they get taken in and assured by statements like these:
From the moment our customers reserve one of our new homes, we pledge to make the experience enjoyable and informative each step of the way.
We aim to take care of our customers, not just when they are buying but also when they have moved into their new home. All of our staff are trained to provide a high level of customer service and to deliver our comprehensive pre-move and after sales pledge to our customers.”
“On completion of your new home we will provide you with a quality assured certificate for you to keep within your Masterfile.”
Pity their homes are not 100% complete when some of their buyers are told they are! Persimmon also state on their website that:
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!
Posted in Help To Buy, New Homes, Persimmon, Snagging and Quality
Tagged barratt, bellway, customer care, help to buy, house builders, new homes ombudsman, persimmon, quality, snagging, standards, taylor wimpey
Buyer Cara Waligura reported a nasty smell emanating from the bathroom of her new Persimmon home soon after she moved into her new home on the South Shore estate opposite Blyth beach. But Persimmon failed to resolve the drainage problem until recently – nine months after it was first reported!
She told “Mr Justice” of the Evening Chronicle how Persimmon’s contractors left a “gaping hole” in the bathroom whilst trying to identify the source of the stench. She said: “Our new home stinks and so does Persimmon!”
Defective “Durgo” was the cause
“Since moving into our newly-built home in January we have had to endure a horrible drainage smell in the bathroom. We are now nine months into complaining but we are getting no joy. After many calls and tears we still have a hole in the bathroom wall and an awful stink in all of the upstairs.”
Apparently even the NHBC issued three warnings to Persimmon to carry out work that is required under their Buildmark warranty.
John Eynon, deputy managing director for Persimmon Homes North East, told the Evening Chronicle: “This issue has been on-going for some time but time-scales have been agreed for it to be resolved. I would stress that the design complied with building regulations and NHBC technical guidance at the time of occupation and was accepted by the NHBC. Subsequent investigations and works to try and remove the smell have been ongoing and the final solution was agreed with the NHBC to vent the soil pipe to the atmosphere, in lieu of the durgo valve that had been fitted. Unfortunately, there was a delay in completing the works due to organising suitable sub-contractors to minimise disruption. We apologise that the problem was not quickly identifiable but the solution should resolve the matter now. I have personally made several attempts to contact the customer whilst my customer care team have been dealing with the issue.”