Persimmon: House-building giant faces loss of contract amid government concerns over Help to Buy scheme

The company recently came under fire by politicians and shareholders over a £75million pay packet for its former boss

Tom Pilgrim
Saturday 23 February 2019 02:22
A 'for sale' sign is displayed outside a new build house on a housing estate by developer and housebuilder Persimmon
A 'for sale' sign is displayed outside a new build house on a housing estate by developer and housebuilder Persimmon

Housebuilder Persimmon's right to sell Help to Buy homes is under scrutiny amid government concerns over the company's behaviour.

An extension of contracts for the scheme from April 2021 is soon to be reviewed by housing secretary James Brokenshire.

"James has become increasingly concerned by the behaviour of Persimmon in the last 12 months," a source close to the minister told PA.

"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."

Launched in 2013, Help to Buy allows buyers to put down a 5 per cent deposit on a newly-built home and get a government equity loan for up to 20 per cent, or 40 per cent in London, of the purchase price.

"Given that contracts for the 2021 extension to Help to Buy are being reviewed shortly, which overall is a great scheme helping hundreds of thousands of people into home ownership, it would be surprising if Persimmon's approach wasn't a point of discussion," the source said.

It is understood that any new government funding scheme will not support the unjustified use of leasehold for new houses, which includes the new Help to Buy scheme from April 2021 to March 2023.

Persimmon recently came under fire by politicians and shareholders over a £75m pay packet for its former boss Jeff Fairburn, who left the company at the end of last year.

In January, the housebuilder hiked full-year profit expectations thanks to increased production of homes and a robust housing market in the UK.

For 2018, group revenue increased 4% to £3.74bn, with new housing revenue increasing by 4 per cent to £3.55bn.

PA