Troubled homes builder Persimmon faces losing its right to sell Help to Buy funded homes, it has been revealed.
Secretary of State for Housing James Brokenshire (pictured, below) is said to be reviewing the company’s participation in the scheme after allegations of poor building standards and punitive leasehold charges emerged recently, The Times newspaper has reported.
All the UK home builders’ contracts under the £8.3 billion Help to Buy scheme are up for re-negotiation after the scheme was recently extended to 2021.
The newspaper was told that Brokenshire has become increasingly concerned about the behaviour of Persimmon, and that its leadership does not ‘seem to understand that it is ultimately accountable to their customers’.
Half of the homes the company built last year were funded by Help to Buy, which has helped Persimmon triple the profit it makes from each house from £22,114 in 2012 to £60,219 in 2018.
The company is expected to report profits of over £1 billion for 2018 when it reveals its final year end results tomorrow.
The news of Brokenshire’s decision to scrutinise Persimmon ends a disastrous few months for the company’s reputation, despite its huge profits.
In November its then CEO was asked to step down after a furore over his £75 million bonus following a car-crash BBC interview, while the company has been at the centre of the leasehold house miss-selling scandal that prompted the government to propose a reform of the tenure.
“The company has been the main offender in spreading leasehold houses around the country, creating homes which include an investment asset for someone else,” says Sebastian O’Kelly of the Leasehold Knowledge Partnership.