“Persimmon expects higher profits as help-to-buy props up prices”

“… Persimmon is one of the main beneficiaries of the taxpayer-funded help-to-buy scheme, first launched by George Osborne in 2013. When the scheme was extended in 2017, a report by Morgan Stanley found that the £10bn of taxpayers’ cash had mainly benefited housebuilders, rather than buyers, by pushing up prices.

Persimmon said it was in an “excellent market position” ahead of the key spring selling season, despite “increased levels of uncertainty” due to Brexit. It had £1.39bn of forward sales reserved at the end of last year, up 3%. Rival Taylor Wimpey was also upbeat about its outlook last week.

Both housebuilders are more cautious when it comes to buying land. Persimmon said it was taking a “selective approach” and Taylor Wimpey revealed that it had walked away from or was trying to renegotiate 2,000 plot purchases – amounting to about 11% of the total land it bought last year. …”

https://www.theguardian.com/business/2019/jan/15/persimmon-profits-help-to-buy-prices

“New homes ‘crumbling due to weak mortar’ : affected householders gagged about repairs

“Hundreds of new properties have been built using weak mortar that does not meet recommended industry standards, the Victoria Derbyshire show has found.

There are reports of homes with the fault on at least 13 estates in the UK.
The full extent of the industry-wide problem is hard to measure as some homeowners have been asked to sign gagging orders to claim compensation.

The industry says mortar performance is a complex issue and can be affected by a number of factors.

One of those homes was owned by Vincent Fascione, 70. He says he was watching football on TV one evening in 2016 when he heard a loud cracking noise from the external walls of his house.

The next morning, he found a sand-like substance all over his front path and driveway. Photographs and video from the time appear to show growing cracks in the mortar holding his bricks together.

Mr Fascione, from Coatbridge outside Glasgow, bought his semi-detached property in 2012 for £112,500.

He complained to the homebuilder, Taylor Wimpey, and to the NHBC, the industry body that signs off and provides the warranty for most new-build houses.

‘Disastrous’

Under NHBC guidelines, mortar in most areas of the UK should be made of one part cement to 5.5 parts sand.

In severe weather areas such as Coatbridge, there should be even more cement in the mix to make it stronger and more durable.

Laboratory tests on samples taken from parts of Mr Fascione’s home showed the amount of sand was almost three times higher than recommended.

“I’m the guy who retired and decided to buy a new-build house,” he said. “I’ll never buy a new-build house again – never. It’s just been disastrous for me.”

After 18 months of complaints, the NHBC bought back Mr Fascione’s home at the market rate and he is living in alternative accommodation.

The organisation said it had done so because the performance of the company it had employed to repair the property had not been good enough and “in consideration of Mr Fascione’s personal circumstances”, not because of the original issue with the mortar.

‘Widespread and serious’

The Victoria Derbyshire Programme has heard about new build properties in at least 13 estates from Scotland to Sussex, built by different companies, with what appears to be a similar problem.

In one single estate in the Scottish borders, it is thought Taylor Wimpey has agreed to replace the mortar in more than 90 separate properties. The homebuilder says an assessment by engineers found “no structural issues” with the homes.

“This is both widespread and serious,” says Phil Waller, a retired construction manager who has blogged about the problem.

“It cannot be explained away by the industry as a few isolated cases.”

Exactly why the weaker building material may have been used is unclear.
In some cases, the housebuilder may have simply used the wrong type of mortar. In other cases, errors may have been made mixing and laying the material on site.

Some construction experts also blame the switch to a new type of factory-mixed mortar, which might pass a different strength test in the laboratory but not always be strong enough in the real world.

Non-disclosure agreements

Faced with what could be an expensive repair bill, many homeowners have been told by their own solicitors not to go public until the issue is resolved.
In some cases, customers have ultimately had their houses bought back by either the homebuilder or the NHBC.

In others, it appears repairs have been made and compensation paid as part of a deal that involves the signing of a non-disclosure agreement or gagging clause.

One homeowner in the north-west of England told the programme: “The only comment I can make is no comment. I’d like to speak out but at the end of the day I have to protect my investment.”

A gagging clause may stop the property owner talking not only to the media but also to neighbours in the estate who may be facing similar problems.

“It’s going on, it’s just not being talked about,” says Mr Waller.
“Non-disclosure agreements should be banned full stop. If it’s all covered up, more victims are likely to be drawn into the net and make the same mistakes.”

An NHBC spokesman said it included a confidentiality clause in a “small number of rare circumstances” but declined to disclose the number.
He added: “We work with builders to help them improve the construction quality of the homes they build. However, it is the builder who is ultimately responsible for the quality of the new homes they build.”
Taylor Wimpey apologised to Mr Fascione for the issues experienced with his home.

A spokesman said: “We are committed to delivering excellent quality homes and achieving high levels of customer satisfaction. On those occasions where issues do arise, we endeavour to resolve those issues as soon as practically possible.”

https://www.bbc.co.uk/news/business-46454844

Developers (“Cranbrook Limited”) still seem to hold all the cards in the town

From Town Council website:

“For distribution – question: What is “Cranbrook Limited” referred to in the last line?

Town Council site:

“The Town Council has been advising previously that we have been chasing the Consortium to release householders from the rent charge deed and yesterday we received the following statement:

“The development partners, Persimmon Homes, Taylor Wimpey and Hallam are continuing to work with their agents to conclude the Estate Rent Charge audit process and Deed of Release on final payment of balances due from each household. Please bear with us as we complete these tasks. We will continue to liaise with the Town Council on this and update you further in due course.”

Whilst we are doing all we can to help progress this matter, the Town Council is not responsible for the development and distribution of the documentation which removes the rent charge deed from individual households – it is and remains the responsibility of Cranbrook Limited.

The Town Council will continue chasing this matter on a regular basis.”

“Help to buy” – or help to rip off?

“Britain’s biggest housebuilders have doubled the average profits they make from each home since the Help to Buy scheme was launched.

Analysis by The Times reveals that the top five builders in Britain are making an average profit of £57,000 on each house they sell, compared with a mean average of about £29,000 in 2007.

Barratt, the biggest builder, is making almost double the amount of profit compared with ten years ago but is building only 411 more homes. Another builder, Bellway, is making more than £58,000 profit a house compared with a little more than £30,000 in 2007 but is building 2,000 fewer homes.

At the time of its launch in 2013, it was hoped the scheme would stimulate house-building. When it was extended in 2014, Mark Clare, then chief executive of Barratt, said: “Britain urgently needs more homes and by setting out a longer-term framework for Help to Buy this announcement will enable the industry to deliver just that.” Yet figures show that the total number of new houses delivered has barely changed since the introduction of the scheme.

The profits last year have been compared with 2007 because this was the last full year that housebuilders were at their peak before the financial crash. Annual pre-tax profits were divided by the number of homes built in each year to reach a “profit per house” figure.

Britain is facing its worst housing crisis in generations, with ownership at a 30-year low and a record 1.8 million families with children renting privately.

Housebuilders were quick to point out that underlying growth will have boosted profits, with house prices having risen by 23 per cent across the UK since 2007. They also noted that they were paying huge amounts back in debt each year at high interest rates before the financial crash, compared with today, when they have millions in cash at the end of each year.

However, analysts believe that a large driver of profits is the government’s Help to Buy scheme, which supports about 40 per cent of housebuilders’ sales. Robin Hardy, an analyst at Shore Capital, believes that housebuilders would be making £22,000 less in profit on each house built for first-time buyers if Help to Buy was not in place. “We reckon that homes sold through Help to Buy are 53 per cent higher than in June 2013, whereas house price figures from Land Registry or Nationwide suggest that across all first homes it’s more like 19 per cent,” he said. “That suggests that someone is gaming the system.”

Neal Hudson, a housing expert at Resi Analysts, said that shareholders had become “the main priority” for housebuilders since the financial crash. “The over-arching factor has been big pressure from the City,” he said. “The priority for them is profit margin not the number of homes built.”

Persimmon, Britain’s second-largest housebuilder, made an average profit of just over £60,000 on each house it built in 2017. In 2007 the figure was £36,787. It built only 138 more homes.

The housebuilder made pre-tax profits of £966 million in 2017 and has a war chest in net cash of £1.3 billion. Jeff Fairburn, its chief executive, was paid £75 million in a bonus scheme last year, which was more than the highest paid banking executives on Wall Street.

Lord Best, vice-chairman of the all-party parliamentary group on housing, said: “These bumper profits come at a time of growing recognition of the catalogue of failings of major housebuilders: poor design, miserable space standards, defective workmanship, delaying development to keep prices high . . . and exploiting a loophole in the planning process to renege on their obligations to include affordable homes in their developments.”

However, developers said the type of product they build has changed, with far fewer flats and a much tighter control over what type of land they buy.

A Home Builders Federation spokesman said: “House building is cyclical. After the financial downturn companies posted big losses and had to make huge writedowns on the value of their land. Many companies disappeared. Since 2013 output has increased by 74 per cent, an increase that as well as providing desperately needed homes has given the economy a huge boost.”

Source: The Times (pay wall)

Barclays refuses mortgages on controversial Taylor Wimpey new homes – and Taylor Wimpey share price INCREASES!

“Scandal hit Taylor Wimpey has suffered a blow after Barclays refused to offer mortgages at a flagship development because of fears over leaseholds.

The housebuilder is seeking buyers for its Chobham Manor site in the Queen Elizabeth Olympic Park in London but the properties come with complicated leases.

Barclays told one family looking at a property they could not have a mortgage because of a clause which might mean the lease was terminated if one of Taylor Wimpey’s subsidiaries went bust.

If that happened the bank would be unable to get its money back.

Taylor Wimpey has pledged to fix the problem but would not say how many properties were affected at the site, where prices are as high as £1million.

The firm has been criticised for selling leasehold homes with unaffordable ground rents.

Shares rose 1.1% or 1.85p to 170.65p.”

http://www.thisismoney.co.uk/money/markets/article-6108205/Taylor-Wimpey-hit-leasehold-woes.html

Do you have a Taylor Wimpey house? Check your mirrors!

“A house builder is checking wardrobe mirrors at a new development after one fell and ‘exploded’ near to where a baby normally sleeps.

Jennie and Joe Adams claim full-length wardrobe mirrors were ‘stuck on with tape’ at their new home in Gorebridge, Midlothian.

As a result, they say one of the mirrors fell off and crashed to the floor with a massive bang, leaving shards of glass everywhere. …

A spokeswoman for Taylor Wimpey East Scotland said: ‘We are very sorry to learn about the situation at our Harvieston Park development, and we have carried out a full investigation in conjunction with our wardrobe door installer to understand the circumstances.

‘We have apologised to the family involved and we have offered our assistance to resolve this matter for them.

‘As an additional precaution, and to provide comfort to other homeowners living at the development, we will conduct additional checks on similarly fitted mirrored wardrobe doors that could be affected to make sure this issue does not happen again.’

http://www.dailymail.co.uk/news/article-6071415/Taylor-Wimpey-forced-check-mirrors-new-housing-estate-failure.html

Taylor Wimpey, Archant, EDDC and red dust in Littleham, Exmouth : “fake news”?

Below is information from an Exmouth resident sent to an Archant local reporter regarding development at Littleham, Exmouth, the “red dust” it is creating and its effect on a large number of frustrated residents.

The resident has received no reply to either email and the newspaper has not balanced its original mild article to reflect the information in these emails:

11 August 2018:

Ms Brainwood [Archant reporter who wrote original article]:

Further to my email from last week I write to inform you of the following. It has been noted by the way that you did not pay me the courtesy of a reply.

Local residents are quite rightly annoyed that your article gave false impressions.

You reported the following :

1. The only residents to be affected were two elderly people in Buckingham Close.
2. The only area affected was indeed Buckingham Close.
3. Taylor Wimpey were doing everything they could to minimise the red dust site vehicles generated.
4. EDDC were happy that the red dust was “ within limits “.
5. Environmental Health Officers from EDDC were quite happy with the overall situation.

The real situation could not be further from the truth.

If you had asked local residents they would have informed you the red dust was experienced in Littleham Road, Midway, The Crescent, Jarvis Close, The Broadway, Douglas Road and Cranford Road just to name a few areas.

Local resident who I have spoken to agree your article is at best sloppy journalism and at worst, fake news.

I read on the Exmouth Journal website your Group Editor Philip Griffin tells us the paper is “ respected for it`s balanced reporting “. We all had a good laugh at that.

For you information the cycle path in Jarvis Close north of Plumb Park is being currently dug up by South West Water to lay pipes. The work will last for 5 weeks. More excessive noise, more disruption and even more dust just a couple of metres from residences in Littleham Road.

Finally, it is your prerogative not to reply to my emails, it is our prerogative not to purchase your paper. “

and the resident’s earlier email to which the resident also had no reply:

“2 August 2018

To: laura.brainwood@archant.co.uk
Subject: Red dust causes misery for residents near Plumb Park development

I would like to make you aware of a few facts regarding the current red dust problem that you reported on in the 1st August 2018 edition of the Exmouth Journal.

“ Taylor Wimpey have taken measures to reduce the impact “. This is not correct.

When I have contacted their Exeter call centre ( 01392 442617 ) they say dust suppression is taking place, but it is not. We are told a water bowser “ damp down” every day. As the site is visible from my bedroom window in Littleham Road, 30 meters from the north fence, I can inform you it never takes place. We are also told a street sweeper is used to suppress the dust. We have never seen the vehicle.

A resident who lives in Jarvis Close (his wife has a very serious case of COPD), confronted the Site Manger face to face recently and was told “damping down“ takes place in certain areas every 20 minutes. This is a lie.

I have contacted Environmental Health to complain about the red dust. I am not the only Littleham Road resident to have done this.

Alice Gill EHO did call back to inform me that Taylor Wimpy is taking action to reduce the dust. She is telling me what Taylor Wimpey is telling her. It is just not happening. Recent emails informing them again, that there is still a big problem have been ignored.

Food has to be covered to stop contamination from the dust in the kitchen. As windows are left open due to the warm weather we even have dust on tooth brushes in the bathroom. It has permeated into closed cupboards. Yes. It is inside the house!!!

In the meantime elderly resident who have COPD have to inhale red dust, along with everybody else, just because Taylor Wimpey can`t be bothered to do anything.

EDDC Development Management Committee was informed in June 2013 by many local residents that this development would blight the lives of local people. They were not interested.

Perhaps your readers would like to know a few facts regarding this issue, plus the current disinterest.”