Britain's New Build Scandal: Channel 4 Dispatches

15 July 2019

Monday 15th July, 8pm, Channel 4

HOUSE BUILDING GIANT:  “WE CAN AND WILL DO BETTER”

Dispatches investigates allegations of shoddy standards, poor customer care, sky high profits and executive bonuses at Britain’s most profitable builder, Persimmon.  It also examines the government’s Help to Buy scheme and asks whether it is value for money.

In response to the programme, Persimmon acknowledges that on customer care "we fully accept that on too many occasions in the past we have fallen short. We apologise without reservation to the customers featured in this programme.”

• "We can and will do better" says home-building giant,
• Persimmon point to their new retention policy as a "a clear signal of cultural change within our business".
• But the policy initially allowed home-buyers just 24 hours after receiving keys to find and report faults on their new homes.
• After Dispatches began making the programme Persimmon changed the reporting period to a week - still not long enough according to Homeowners Alliance.
• Dispatches commissioned an independent inspection of a brand-new Persimmon home. Harry Yates, who has ten years’ experience in construction management, found no less than 295 snags, with 70% so serious that they fell outside of building regulations  ’tolerance’ limits. (He found a fire door that didn’t close, leaking sinks in every bathroom, showers that weren’t sealed and faulty waste connections.    

Background:

• The government has spent nearly £12billion of taxpayers’ money on the Help to Buy scheme, which has in turn turbo-charged the profits of a handful of powerful house builders, above all, Persimmon.
• Persimmon build one in seven of Help to Buy homes on the market, more than any other developer.
• When buyers are asked to rank their new home experience Persimmon is bottom of the industry Home Builders Federation table, it rates only 3/5 stars along with a handful of other much smaller builders.  – No other developer currently ranks lower.
• Persimmon makes an average of £66,000 profit for every single house it sells, 30% return, which is higher than any of its competitors on the government scheme.

Merryn Somerset Webb, editor Moneyweek:

“And it’s [Help to Buy] worked out absolutely fantastic for the house builders and we have seen their share prices rocket.  We’ve seen profits at least double at nearly all of them. It has fully changed the fortunes of big companies in a way that would never have happened without government support. Help to Buy has been a big part of keeping this market very anticompetitive.”

• Persimmon’s former CEO Jeff Fairburn took home a £75million bonus last year.

Case Study – Becky Williams, 24, Wakefield – multiple mistakes in the build

Becky used Help to Buy when she bought her first home in December 2017. When she moved in, there were still builders on site, a workbench in the middle of her living room and dust everywhere.

Snags in the property included a smashed front window, too small doorframes, a staircase with cracks down one side, big gaps in the pointing and bricks that could easily be moved by hand at the front of the house. When the builders came to repair the site, they took hammers to the doorframes to move them back, this left cracks along the walls and exposed nails sticking out.

It took 16 months for the team to finish the snagging.

Case Study – Lukas Platts and Richard Day Wakefield – Threatened with fines by Persimmon

Lukas bought a property and the final stages of the sale was rushed. One day they received a call saying that the property was ready, and they needed to pick up the keys and sign the final paperwork at 5pm.

They were informed that if they didn’t complete by 5pm they would incur a £50 charge, per day for 10 days, after that they were at risk of legal action and the risk of losing the property.

They signed and took the keys but couldn’t move in as there were over 200 minor issues of which 5 were major. It was three months before the house was fit to inhabit, they were paying their mortgage for that period.

Persimmon say that the couple were given the required 14 days notice of completion.

Case Study – Theo Borstlap and Kelsey Alldritt, Pembroke, Wales – fire barriers not installed

Kelsey and Theo bought a new home from Persimmon, an independent investigator found 167 snags. Six months after they moved in Persimmon have done some of the minor works, but some big structural jobs, despite promises, have yet to be tackled.

One wall was 30mm off the vertical, the industry standard variation is 8mm.

The report showed that their timber-framed house was missing some fire barriers, which was only discovered after they spent hundreds of pounds on a private investigation.

Persimmon have now retro-fitted the fire barriers that it was told were missing. It’s only inspected the house via the loft, but from there you can’t tell whether barriers are correctly installed lower down the walls, and around windows and doors.

Persimmon are now inspecting 3,200 timber framed buildings in the south west and conducting spot checks in other areas after residents raised concerns about fire protection.

According to experts the only way of really knowing if a house is safe is to check and get independent confirmation that fire barriers are being fitted during construction, not afterwards when it’s harder to see into tight cavities 

Greig Adams, Chartered Building Surveyor, “It’s extremely important that we consider these concealed spaces – these cavities – because within a timber frame the fire can spread extremely quickly.  A post construction inspection will only allow a very limited view on exposed areas within the attic space even with drilling walls, even with inserting specialist cameras, you cannot state that all the fire barriers are there, you cannot state that they are installed correctly, because you need to inspect during the construction phase.”

Persimmon says that its “independent fire risk assessor is inspecting cavity barriers at a lower level in properties.”

Persimmon attempting to improve quality:

Under pressure, Persimmon says it’s deliberately slowing some sales to improve quality. And, buyers can withhold some money until defects are fixed. However, the amount - 1.5%, - is only around £3,600 on an average Persimmon home. 

Originally, Persimmon said home buyers would have to identify faults on the same day they got their keys.  Since we started making this programme, Persimmon have changed their mind.  Now home buyers, having just moved in, have a week.

Paula Higgins, Home Owners Alliance, “We’ve got concerns over the proposal as it stands, of whether it will actually support and protect consumers if you’ve got emerging defects which can be quite common, that won’t be covered by this announcement. It’s only one and half per cent that they’re saying that people can keep back for a period of time.  We would say the industry standard is usually two and a half or five per cent. “ 

Persimmon response:

Persimmon told Dispatches in a statement: ‘we fully accept that on too many occasions in the past we have fallen short on customer care’ and ‘we can and will do better’. ‘We apologise without reservation to the customers featured in this programme’. 

The Housing Minister Kit Malthouse told Dispatches, “I expect all developers to deliver good quality housing on time, and to treat buyers fairly.  It’s unacceptable if they deliver anything less. We know more needs to be done to protect buyers and our New Homes Ombudsman will protect the rights of homebuyers and hold developers to account.”  His Department added: “The government will be considering carefully how the developers who work with us meet the standards and quality that customers expect and deserve.”

BRITAIN’S NEW BUILD SCANDAL: CHANNEL 4 DISPATCHES, Monday 15th July, 8pm, Channel 4

WRITTEN AND PRESENTED BY:  LIAM HALLIGAN

PRODUCER:  JANE DRINKWATER

EXECUTIVE PRODUCER:  ANDREW SHELDON