Persimmon’s profits soar past £1bn on back of taxpayer-funded Help to Buy scheme

Almost half of the housebuilder’s homes were purchased through the government scheme last year, while executives received multi-million pound bonuses

Ben Chapman@b_c_chapman
Tuesday 26 February 2019 11:06
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Persimmon boss Jeff Fairburn shuts down interview after refusing to talk about £75m bonus

Persimmon’s profits have soared to more than £1bn in another record year for the housebuilder which has benefited from the government’s help to buy scheme.

Pre-tax profits jumped 13 per cent to £1.1bn, and the FTSE 100 company confirmed interim boss Dave Jenkinson would take over permanently.

Mr Jenkinson took the role after predecessor Jeff Fairburn left due to ongoing controversy about his £110m pay deal, subsequently cut to £75m, one of the largest ever for a UK-listed company.

Persimmon said the payout, which provoked anger from shareholders and the wider public, has become a distraction. Mr Jenkinson received £38m last year in his previous role as managing director.

Housing minister James Brokenshire is said to be “increasingly concerned” about Persimmon’s behaviour, including its use of leasehold contracts, the quality of its buildings and its leadership.

Persimmon’s shares fell 5 per cent after news its participation in the help to buy scheme was under review. The company sold 7,970 homes under the scheme last year, almost half of all its sales, and up from 7,682 in 2017.

For each of those sales the government provided an interest-free loan to buyers, a move which critics say has served to further boost house prices and returns for shareholders. Persimmon has returned £2.2bn to shareholders in the past seven years.

A source close to the housing minister said: “Leasehold, build quality, their leadership seemingly not getting they’re accountable to their customers are all points that have been raised by the secretary of state privately.”

Leasehold homes have come under increasing scrutiny as homeowners have been hit with thousands of pounds in fees to carry out repairs on their own properties.

A spokesperson for the Ministry of Housing, Communities and Local Government said: “We expect all housing developers to deliver good-quality housing, to deliver it on time, and to treat purchasers of newbuild homes fairly.

“Last October we announced our intention for there to be a new homes ombudsman, and we intend to introduce legislation to require developers of newbuild homes to belong to this body.”

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