Proactive Investors - Run By Investors For Investors

Persimmon to let customers withhold 1.5% of house prices until housebuilder resolves faults

"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,” chief executive Dave Jenkinson
Persimmon has received widespread criticism over poorly built homes and executive pay

Housebuilder Persimmon PLC (LON:PSN) has unveiled a customer care improvement plan following complaints about the quality of homes and leasehold charges attached to new homes.

Under the plan, a buyer’s solicitor can withhold 1.5% of the total value of a home until any faults identified at the time of release are resolved.

READ: Persimmon to change pay rewards to focus on quality homes amid reports of possible Help-to-Buy ban

Based on the group’s current selling prices, the average amount withheld will be about £3,600 per home.

Persimmon’s legal advisors have started drawing up new standard contracts that will include the policy.

 "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,” chief executive Dave Jenkinson.

“The initiatives we have already announced, including the action taken in the new year to deliver greater accuracy of anticipated moving in dates by adopting a more targeted approach to the phasing of sales on specific sites and the improvements and investments that we have made in our customer care team, operations and technology over the last few months are beginning to take effect.   

“We are now accelerating the pace of change through the introduction of contracted retention which will give homebuyers far greater satisfaction at the completion of the purchase. “

Persimmon in hot water over poor quality homes 

The move comes after many Persimmon customers complained about poorly built homes with windows cracking and pipes leaking shortly after moving in.

Last month it emerged that the government was considering banning the housebuilder from the Help-to-Buy scheme following the customer complaints.  

Liberal Democrat leader, Vince Cable, has accused Persimmon of “pinching their profits from the public purse”.

“Far from benefiting first-time buyers, the major effect of help-to-buy is to drive up demand while having no effect on supply,” he said.

“The result is not help for those who need it, but a boost to the profits of big developers.”

Criticism over executive pay 

Persimmon has also come under fire over attempting to pay its former chief executive Jeff Fairburn a bonus of £110mln.  

Fairburn was asked to leave in November even after accepting a reduced payout of £75mln following pressure from shareholders and the public.

In its full-year results last month, Persimmon said it would change its pay and incentives to include a “greater emphasis on both quality and customer care with plans that are more rigorous than we have had in the past”.

The company also said it would step up efforts to improve customer service and deliver quality homes by ensuring new sites are built to a “more advanced stage” before being released to the market.

In morning trading, shares dropped 1.7% to 2,174p.

View full PSN profile View Profile

Persimmon Timeline

Related Articles

June 26 2019
Analysts at Peel Hunt said: “The enlarged vehicle now delivers a very durable income proposition underpinned by a Government covenant and sector-leading income efficiency”
June 21 2019
Since its initial public offering five years ago, the company has deployed new equity, reached target net gearing and grown dividends annually.
February 09 2019
Belvoir has expanded its operations in mortgages to provide an alternative source of income

© Proactive Investors 2019

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use