Tag Archives: taylor wimpey

Quality compromised in rush to build new homes

At last! Peter Redfern admits quality is being compromised in the rush to build new homes

Pete RedfernTaylor Wimpey CEO Peter Redfern has said that the Government’s target to build a million homes by 2020 is unachievable and quality will be compromised if the industry does try to meet it. Well if anyone should know about compromising the quality of new homes it’s Redfern! Taylor Wimpey has a terrible reputation for building poor quality homes and when their customers complain, an equally poor record and attitude to fixing these defects. This, despite the claims made on Taylor Wimpey’s website including: “The standard of home building in the UK has never been higher than it is today.”   ” it’s like buying a brand new car and driving it out of the showroom” Only with a new car it is unlikely to have as many problems as a new Taylor Wimpey home!

Only last November, Taylor Wimpey were extensively featured on the Dispatches Documentary “Britain’s Nightmare New Homes.” In 2012 Taylor Wimpey were again panned on the BBC Watchdog programme.

The company’s unhappy buyers regularly lambast the builder on social media with the twitter feed #thinkwimpeythinktwice. On 5th December 2015,  BBC South today recently featured the story of Evelyn Lallo who has been living in temporary home since June 2015, whilst Taylor Wimpey sorts out serious defects.

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Housebuilding Prestigious “Bodgers” Awards 2015

Bodge the builder – can they fix it?

bodger trophyWell probably yes, but they will move heaven and earth to avoid doing so. It is at this time of year that I like to produce a light-hearted article, poking fun at the general house building industry. However the increasing  poor quality of new homes and the lack of any discernible after sales service mean that most new home buyers have experiences that are as far from funny as you can get.

Nevertheless, this year I am proud to announce the inaugural winners of the “BODGERS” awards. These are the awards for the very worse in everything housebuilding that I have come across over the last twelve months.

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Help To Buy Helps Trigger Large Bonus Windfalls

Help to Buy helps trigger large bonus windfalls for housebuilder CEOs and senior directors.
Help To Buy jpgOn 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.

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Corbyn appoints Taylor Wimpey CEO Redfern to advise on housing

Pete Redfern Taylor Wimpey CEO is Corbyn’s appointed housing tsar.

CorbynIt would appear new labour leader Jeremy Corbyn has appointed Pete Redfern, chief executive of Taylor Wimpey, to lead a review of housing to help form Labour policy on the issue. Quite what housing expertise Corbyn thinks Redfern, with his background in accountancy, can bring to the table is a mystery to me. If is often said that accountants know the price of everything and the value of nothing. Redfern trained as an accountant with KPMG. He then became financial director of Rugby Cement before he joined George Wimpey in 2001. He  became CEO of Taylor Wimpey in July 2007 following the merger with Taylor Woodrow.

He chose PoorlyIt has emerged that Corbyn’s newly appointed housing adviser is the CEO of a British company that has been associated with tax avoidance. Mr Corbyn, you have chosen….. poorly!

Documents show housebuilders Taylor Wimpey had a Luxembourg division which it used to cut its UK tax bill – exactly the kind of scheme that Corbyn and Shadow Chancellor John McDonnell have pledged to bring to an end.

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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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Why a certain types of person buy new homes from particular housebuilders

Have you ever wondered what type of person buys a new home from particular house builders?

For a bit of fun at this time of year, we came up with the idea of trying to figure out the type of people who buy new homes – their personality, background, social class etc for each of the major house builders.

We already knew that new home buyers are generally people who cannot do DIY, that hate gardening, but like living with strangers looking at them watching television and have few possessions and small furniture!

We also already presumed that Persimmon home buyers would mostly comprise of Sun readers, gullible people who eat bad diets and vote on X factor. Who look for homes near a tattoo parlour, bookmaker, chip shop would be essential.

So this year we asked the gifted satirist “Ted Da Yonga” to come up with something. “Ted” is the author of the Mr Anthrop’s Blogspot “A tale of corporate greed, callousness and moral bankruptsy which started in reaction to an outrageous claim by Persimmon Homes and has since become a series of fictitious (mostly!) satirical stories based on real life situations facing the many buyers of new homes.

As with all Ted’s work please note it is satire – “this means it is for entertainment only and is not true. Mr Anthrop accepts no responsibility for the accuracy or otherwise of this information – it is all untrue. If you are a house developer reading this, well done –  ‘No child left behind’ is working!”

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Taylor Wimpey CEO Peter Redfern suggests there is scope to increase prices of new homes even in a falling market!

The Daily Telegraph recently published a story featuring Taylor Wimpey CEO Peter Redfern claiming that new regulations following the Mortgage Market Review, which have restricted borrowing for second-hand homes, have not adversely impacted the business and Help to Buy is still being used by their first time buyers. The company also announced that it is fully sold for 2014 and has confirmed a profit upgrade.

Pete Redfern

Peter Redfern

Mr Redfern, in a somewhat blatant attempt to talk up the prospect of further  new home price increases, is claiming that housebuilders have more room to adjust prices upward since they were starting from a lower base, having fallen behind valuations for existing homes after the great recession. So are we to interpret that, housebuilders such as Taylor Wimpey have not increased their prices in line with the general local market since 2008?

He said:

“Housebuilders have to keep liquidity in the business and have more room for price adjustment sellers of existing homes by contrast may take their property off the market if they are not getting the right offer. Big houses in the country market are also proving harder to sell, where housebuilders are not that prevalent. This is having a negative impact on the outlook for the market for existing homes.”

Schemes, in particular Help to Buy, continue to give the new home industry a taxpayer-subsidised helping hand.   “………..attractive products that help credit availability and affordability – whereas stricter mortgage rules have started to affect sales in the second-hand market. After the downturn mortgage lenders penalised new build specifically apartments as they felt young buyers posed a greater risk with good incomes but low deposits, but these differences are starting to unwind.”

If new homes were penalised, it was because there is always  a 10-20% price premium. Lenders required higher deposits to give more of a buffer to account for the premium and added risk of steeper falls in valauations should the market turn.

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Do the NHBC give Quality Awards only to site managers building high quality new homes?

The NHBC 2014 ‘Pride in the Job’ Quality Awards have recently been announced and it is clear that most of the major house builders have not improved the quality of the homes they build.  See the house builder league tables here for awards in 2014 and previous years.

OLYMPUS DIGITAL CAMERALast year Barratt made history with 102 of their site managers winning awards for quality. This year, despite building more homes on more sites, Barratt won 13 fewer awards – 89 in total, followed by Taylor Wimpey with 70 – just two more than last year!

The remainder of the largest house builders won just a handful of quality awards, much as they did last year – Linden 5, Bellway 29, Redrow 13, Crest 12, Bovis 4 and Berkeley 12. The biggest shock was again Persimmon, the largest house builder by market value, winning a pitiful 8, even less than the meagre 13 their site managers won in 2013!   Clearly this company has problems and appears to be indifferent to the quality of the homes it builds.

It is becoming an increasing concern that the NHBC hand out awards to certain builder’s site managers regardless of their personal management ability or the quality of homes built on their site.  TWPITJ1Last year, the NHBC gave Taylor Wimpey’s Richard Crawford a Quality Award for his site at The Chariots in Andover.  Since then, many unlucky homebuyers have discovered  their homes were not only poor quality, but in some cases also potentially dangerous, with various electrical faults despite passing an “inspection” and incorrectly wired boilers.  Taylor Wimpey 9 months small sizeOne buyer (full story here) has taken over 35 days off work to allow various trades access to his home to fix and repair the defective workmanship. So far (8 months on) CEO Peter Redfern has failed to get personally involved and has not even replied to the owner’s many detailed letters.   Yet this site manager won an NHBC Award for “Quality” for this site!

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Housing minister Kris Hopkins, looking after house builder’s interests regarding Help to Buy

Following our articles on New Home Blog regarding house builders profiteering from the Help to Buy equity loan scheme and the government wasting taxpayer’s money advertising it on television, this letter was received from Housing Minister, Kris Hopkins, (on behalf of George Osborne) in response to the points raised.

It was 11 weeks before Mr Hopkins even responded. His statements are misleading and do not answer the arguments in our articles.

He says: “We are advertising [Help to Buy] to make as many people as possible aware of the opportunity”    

Help To Buy jpgIn response, there cannot be a single person in the UK who has not heard of Help to Buy.  In fact anyone considering buying a new home would have the scheme rammed home by house builder’s sales advisors and mortgage brokers.  There was absolutely no need to advertise Help to Buy on television,  wasting taxpayers money at a time of so-called “austerity.”  It is actually advertsing new build homes.

As for Help to Buy being an “opportunity” this is questionable, as the market is overheating.  Those buying 80% of a new home could well find that in a few years time, they have over-stretched themselves and may even suffer negative equity, especially when the scheme has enabled house builders to increase their average selling prices by around 20%!

He says:  “The Help to Buy scheme is enabling hard working families to access finance to buy a home”

What exactly is the “hard working” family that we are hearing so much about? People who work two jobs?  People who work long hours?  People who work physically hard like scaffolders and miners?  Or are they, as is probably the case, the vast majority of people who do a days work but do not actually get paid a fair wage in return  struggling in the face of higher taxation and rising  grocery, energy and fuel bills – all caused by government policy diluting the real value of our currency.  If the government truly wanted to “help” struggling “hard working” first-time buyers, why not abolish stamp duty land tax rather than subsidise house builders and hand taxpayer’s money to their shareholders?

Surprisingly,  “hard working” new home buyers from overseas can also take advantage of the UK government’s “generosity”.   There are no explicit rules or a requirement of citizenship or residency of those benefiting from loans under Help to Buy, although the schemes cannot be used for the purchase of second homes or for buy-to-let purposes. But how would anyone find out if an overseas buyer also owned a home in their own country and using the Help to Buy scheme as a way to reduce property speculation an investment costs?

He says: it gives “Certainty to house builders”

This is the same line trotted out by various plc house builder CEOs and their lobby group the  Home Builders Federation (HBF) whenever the Help to Buy scheme is called into question.  They still believe that Help to Buy can do no wrong – we’ll see!

He says: “House building has increased 23% since last year.”

This is not unexpected, given the low base starting point after the previous, low cost, credit-fuelled property bubble.   House builders are throwing up as many new homes as they can to make the most of the subsidies while they can.  Put food in front of a pig and it will eat more!

He says: given the increase in house building “It is not surprising that house builders profits have also increased.”

But not by a corresponding percentage Mr Hopkins! Most of the plc house builders have already reported increases in profits of around 50% in their most recent annual reports.  This is not even reflected for a full year of Help to Buy.  Redrow profits are up 107%,  Barratt reported profits up 162%.  In addition, house builders are all reporting increases of 14%-17% in their average selling prices, way above increases in the general market, hence the profit.  You charge more when your customers can pay less, with the taxpayer picking up the difference!   Charging more equals more profit!

He says: “Around 1200 builders have signed up to deliver this scheme, and over 90% are small to medium-sized builders.”

Whilst this may indeed be true,   what it does not reflect is the proportion  of   Help to Buy loans taken up by the largest house builders.  These typically represent on  average, around 30% of their total sales.     Based on the latest available figures from the top five house builders by volume, around 25% -30% of their buyers have used Help to Buy.  That is around 12,000 (62%) of the total 19,394 new homes sold using Help to Buy equity share to 31 March 2014, with five of the largest plc house builders accounting for over 62% of the Help to Buy loans thus far.  This could be even higher when they report accounts with the benefit of a full year of Help to Buy.  For the top ten house builders by volume, Help to Buy accounted for around 15,330 of their sales, nearly 80% of the total Help to Buy loans to just 10 house builders!   So it is misleading in the extreme to imply that small to medium sized builders are getting the most benefit.

He says: “We do not agree that help to Buy scheme is creating a bubble”

George Osborne agrees, but has been distancing himself from possible fall-out lately, saying the BoE has all the tools to prevent a house price bubble.  Obviously Mark Carney the Governor of the Bank of England disagrees as does Christine Lagarde at the IMF who urged the UK Government to rethink Help to Buy last Friday.    But hey, what do they know?   Kris says it’s all OK!

He says:  “There is no evidence of widespread land banking of land with planning permission by the major house builders”

Try looking harder!  Taylor Wimpey CEO Peter Redfern stated in a blog on his company’s website that they hve six years’ supply of land with planning permission.  As Taylor Wimpey has a land bank of around 65,400 plots and built 11,696 homes in the year to 31 December 2013, it would imply all of Taylor Wimpey’s land bank has planning permission but not all of it is being built on!  Even allowing for the 10,000 plots with “planning conditions yet to be satisfied”   Redfern alludes to the fact that his company has 30,000 plots ready to be built right now – half Taylor Wimpey’s land bank!   It is to be suspected that a similar situations exist with the other large house builders, why else was their such a outcry of whinging from builder CEO’s over Ed Miliband’s proposed land grab earlier this year?  Despite whatever Hopkin’s data from Glenigan or opinion from estate agent Savills might suggest!

So there we have it, 11 weeks to come up with a misleading response full of government spin  defending house builders profits yet failing to answer or even acknowledge any of the real issues, much as George Osborne’s did at the Treasury Select Committee meeting on 26 March 2013.

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