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Persimmon allows homebuyer ‘retentions’ in snagging scheme

22 March 2019 | By Neil Gerrard

Housebuilder Persimmon is to allow homebuyers to hold back retentions until snagging issues are dealt with, in a bid to improve its reputation for quality and customer care.

The company announced that it would “assure high finish standards” by allowing homebuyers to withhold a maximum of 1.5% of the cost of the home that they had bought via their solicitor.

The percentage equates to around 6% of the build fabric costs and represents on average of £3,600.

Persimmon said it had instructed its legal advisers to start work on drawing up the detail of a new standard contract and expects the policy to be fully in place by the end of June. 

Dave Jenkinson, chief executive officer of Persimmon, said: "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.” 

"Moving into a new home should be a positive experience enhanced by all the benefits of a new build that is designed for modern living.  We are determined that the experience is not overshadowed by teething problems and providing a homebuyer's retention is an important step towards achieving this."

Jenkinson was appointed interim CEO of Persimmon in November 2018 after the departure of Jeff Fairburn, who became embroiled in a controversy over his remuneration – said to involve a £75m bonus – which the company said had become a “distraction”.

Roger Devlin, Persimmon's chairman, said: "This is a first among the UK's large housebuilders and I hope will lead the way in change across the sector.  This move, and the urgency with which we will introduce it, is a clear and unambiguous signal of cultural and operational change at Persimmon, putting customer care at the very centre of the business."

Comments

Already our industry wastes money because of our over reliance on snagging. This amounts to us trying to inspect quality into the finished product.

But getting a small proportion of these failure costs into the boardroom may be the first step towards building homes right the first time.

1.5% is probably not high enough to incentivize the necessary investment in training and supervision.

Waggler, 25 March 2019

At a time when real money retention-holding is under scrutiny; especially as it refers to the depths of the supply chain, I'm not sure how this aligns with the initiatives in the wider construction industry or what this means for the warranty that I understand is the buyer's traditional protection. It may also give the impression that snaggings are inevitable and enduring, notwithstanding the trend toward greater modular and off-site fabrication (at least in large scale development, and that Persimmons, for one, doesn't expect 'right first time' to be achievable.
We don't have enough detail to understand how Persimmons expect the money flow to operate, who actually 'holds the pain' and who adjudicates full and satisfactory rectification when snaggings do arise and persist. I hope this isn't intended to effectively slip in a limit the extent of recourse available to a buyer.

Steve Frizell, 26 March 2019

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