New boss of Persimmon defends housebuilder between the help to buy scandal



The new head of Persimmon came out today to struggle as the developer faces a struggle to maintain his lucrative right to sell homes under the buy-out system.

The FTSE 100 home maker was strongly accused of making enormous payments to executives and criticizing inappropriate work for poor home quality.

Now he could lose his contract for the project, which was designed to help first-rate buyers enter the property scale but strengthened the company's profits in recent years.

However, new CEO Dave Jenkinson has promised today to improve his business leadership and bring "new customer service initiatives."

The 51-year-old added: "A wide range of projects to improve customer satisfaction began at the end of 2018 and the initial results were encouraging."

There are concerns about the use of Help to Buy to acquire dwellings with leases, customer treatment and leadership as a result of the pay response.

The York-based company last year gave its former CEO Jeff Fairburn a £ 75 million bonus and saw earnings before tax for 2018 rising by 13 percent to £ 1.1 billion.

Mr Fairburn's allowance was particularly controversial because it appears that Persimmon has benefited massively from Help to Buy, a tax-supported system.

The rise comes after the construction of 16,449 new homes last year, an increase of 406 compared to 2017. It was sold for an average price of £ 215,563 – a 1% increase in 2017.

Of these properties, about half, or 7,970, were sold to people using the government-aided purchase system – about 288 more than in 2017.

Market analysts said any move to stop Persimmon using Purchase Assistance would be "a damaging blow to the company."

Critics of the Assistance for Purchase, expected to expire in 2023, show inflation in house prices as well as increasing margins and executive pay to builders.

Mr Jenkinson will continue to play the leading role permanently after the previous boss, Mr Fairburn was forced last November after the bonfire was over.

The builder could now lose the Purchase Assistance contract as housing registrar James Brokenshire prepares a review of the buyer system for the first time.

A source near the minister said: "James is increasingly worried about the behavior of Perzimona in the past 12 months.

"Leasing, quality building, their leadership did not seem to account for their customers, it is all the points the Minister has personally raised."

Purchase Help allows buyers to deposit a 5 per cent deposit in a newly built home and receive a government loan of 20 per cent or 40 per cent in London of the purchase price.

The extension of the contracts awarded to builders for the project from April 2021 will soon be revised by Mr. Brokenshire.

Russ Mold, to AJ Bell broker, said any move to stop Persimmon using Purchase Assistance would be "a damaging blow to the company."

Joshua Mahony, senior market analyst at IG, said: "It seems unlikely that we will find Persimmon excluded from any future program, while many of the issues that the government is considering are historical rather than current practices."

A source close to Persimmon said there was "a real determination to change" between the new housebuilder management team.

A spokesman for Persimmon said: "Our performance over the past few years reflects the group's success in increasing its construction volume to meet British housing needs, in particular by offering lucrative new homes to buyers for the first time.

"From 2012 we have increased our production by 75% and invested £ 3.8billion on new land.

"By the end of 2018 we announced a series of new customer service initiatives and we are sure to improve our performance once the time has come to come into force.

"We also make a major investment in training to tackle skills shortages in the industry."

A representative of the housing ministry said: "This government wants to see more homes of good quality that people are proud to buy and proud to live in.

"We expect all developers to provide good quality residences, deliver it in time and deal fairly with the buyers of the dwellings that are being built.

When the new Persimmon boss, Dave Jenkinson, spent nearly £ 800,000 in a pub near his home country last year, the observers rushed to point out how smart the name is: Shambles.

In addition, the company had already criticized inappropriate work. And the word spreads just as Mr Jenkinson was appointed temporary CEO of Persimmon after the former bos.