Opinion

Readers’ comments | Persimmon’s quality review and snagging retentions in housebuilding

29 April 2019

Persimmon is to conduct an independent review into the way it handles customer care

Persimmon launches QC-led quality review

CM 08/04

Satisfied customers are the result of good design and construction. Inspection is a backstop at best.

Let’s incentivise excellence in design and construction through an award scheme adjudicated by the NHBC that the public can use as a benchmark of the quality they can expect from that developer’s products.

Better reputation, better sales, reduced after-sales costs, better margin – why wouldn’t you?

John Chipman

The quality in volume new housebuilding has deteriorated over many years: a) The NHBC should do its job properly ensuring a high standard; b) An independent clerk of works should be employed by the developer if the NHBC does not carry out its role in ensuring quality; c) Ensure better training of site operatives, a root and branch overhaul of training; and d) Developers should use Local Authority Building Control officers rather than the NHBC or other private providers.

Some of the workmanship I see today on new-build sites today is diabolical, which means on-site supervision is also lacking. When working for George Wimpey in the mid-1970s, we had up to eight snagging lists.

That said there are still very good housebuilders out there, mostly SMEs – they can’t afford a bad reputation. They don’t need a QC to fix it – just call me or anyone who worked in the industry when we almost got it right.

John Money

Persimmon should start speaking to staff that have left the company and ask the reason why.

Alex Green

Nearly 9 in 10 new-build homeowners support snagging retentions

CM 08/04

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 offsite fabrication.

Steve Frizell

But won’t customer retentions lead to an increase in house prices since housebuilders could simply add the snagging retention on top?

Subcontractors do the same thing when they price. If the retention is 5%, they just add 5% to their tender price. If they end up getting the retention, it becomes a bonus.

Housebuilders could do exactly the same. Homebuyers would find themselves holding back “their” own cash.

Gidion Mutyiri

Am I the only one seeing the irony? This all makes sense, so where is the logic for looking to eliminate retentions on commercial projects where the issues can be much greater, not least due to the fact commercial buildings are more complex and often non-repetitious?

Decent contractors should not fear properly managed retentions and the cost of delayed receipt of the money is relatively small (and is inevitably included in the pricing).

Eric Beaven

As a clerk of works, I think that the principal contractor should not be paid anything until the property is signed off as fit for purpose with no outstanding snagging items, not just within the premises but externally too.

This should include drainage surveys, road surfaces, footpaths and landscaping.

This procedure is being adopted more and more, ensuring that the developers design the buildings and construct them properly, allowing new homeowners to access their individual homes without having to negotiate the building site.

Tim Feeney

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.

A 1.5% retention [as a percentage of the cost of the home] is probably not high enough to incentivise the necessary investment in training and supervision.

Waggler

Comments

Have read all the comments regarding Persimmons, only Alex Green is hitting on the answer to this problem.
Customer care is not the problem, it is a solution to a problem, you do not need a large customer care department if you have a good product.
Persimmons Site Managers are expected to hand over more plots than most other developers, with no proper IT and communication, with tradesmen earning 50% more for four and a half days, lets not forget the directors above them pushing for numbers to get bonuses and to see the outgoing CEO leave with £75m after his previous year £55m pay & £55m of shares. Persimmons not customer care is the problem, Investing in its people not the top directors and share holders is the solution.

Denis Barry, 1 May 2019

Denis, the news is the old CEO of Persimmon walks away from the firm with a payout equal to average income of the UK x 1360 people.

That's an awful lot of people who could have been making it go right when it mattered, gone to someone who didn't make it right when it counted, and who has been paid to leave.

I have to wonder what people are thinking to pay out these kinds of sums, no one is worth that much or brings that much 'value' to a business, unless they started it and built it up, or took serious risks with their own money and not someone else's.

It should also be factored, in an industry where margins are 2-3%, that's an awful lot of people struggling so one person can walk away feeling good about failure.

John, 2 May 2019

Why the use of retention?
Get the product right first time, pay subcontractors on time, make sure that the QA procedures are up to date and managed by the site team, implement within the sub contract orders a process of with holding final payments until all has been signed off by the PM/QA manager and Customer Care Manager before the home owner moves in.
Incorporate within the sub-contract order "provide 6-12 months response to defects they may occur" FOC
All in all produce a quality home for the end user.
No need to stop retention, manage the process.

Andrew Wilkinson, 8 May 2019

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