Persimmon is to make a £1 billion profit thanks to taxpayers pouring in money through Help To Buy to get young first-timers onto the property ladder.
And in return, what? The company has been the main offender in spreading leasehold houses around the country, creating homes which include an investment asset for someone else.
So, taxpayers have been subsidising the investments of private equity speculators in residential freeholds, who hide their beneficial ownership behind nominee directors and are often based offshore.
Britain’s most profitable housebuilder faces being stripped of its right to sell Help to Buy homes after allegations of poor standards and punitive hidden charges.James Brokenshire, the housing secretary, is reviewing Persimmon’s participation in the government scheme, which accounted for half of th
An example would be the £1.6 billion Long Harbour fund, run by William Waldorf Astor, the half-brother of Samantha Cameron. Here the Adriatic Land freeholds have nominee directors from the Sanne Group headquartered in Jersey.
So vital decisions concerning leasehold homes – how to remove Grenfell cladding from private blocks or flats or whether to let someone keep a cat in their leasehold property – are taken on behalf of unknown and unknowable owners.
Today’s lead article in the Times says:
“Since Help to Buy was introduced, Persimmon’s profit per house has almost tripled, rising from £22,114 in 2012 to £60,219 in 2018. Half of the 16,000 homes the company built last year were sold under the scheme, which is designed to boost home ownership.”
Taxpayers have poured £8.3 billion into the Help To Buy scheme, which – insanely – is to continue unreformed until 2021.
And who is surprised by this?
“An investigation by The Times last year found that homes available under Help to Buy cost an average of almost 15 per cent more per square metre than comparable properties that were not eligible.”
The vast sums poured into Persimmon have turned its spear-carrying executives into princelings:
Booted out former CEO Jeff Fairburn was in line for a £110 million bonus – he accepted £75 million after public revulsion.
The current MD David Jenkinson, who is running the company, received £45 million.
Finally, the government has woken up to this nonsense: Communities Secretary James Brokenshire is “reviewing Persimmon’s participation in the government scheme”, which accounted for half of the homes it built last year, says The Times.
The Leasehold Knowledge Partnership has been calling for this racket to end for years.
It was owing to our efforts that the Communities Select Committee under Clive Betts MP launched its investigation – with results far exceeding our hopes.
David Jenkinson was one of the plc house builder chiefs questioned by the Select Committee.
Their evasive answers were hardly persuasive.
The realisation is that plc house builders have systematically cheated their own customers by dreaming up wealth-sapping legal tenures, and the rest of us too – by subsidising freehold investment assets for rich speculators.
David Jenkinson, who currently heads Persimmon at last month’s Select Committee hearing, only received a £45 million bonus, unlike his now let go former boss Jeff Fairburn, who got £75 million. None of which is relevant, of course, to ordinary families having their homes turned into investment vehicles for murky ground rent speculators
I think we should discourage everything except RTM because RTM is all there will ever be in our lifetime.
Lets all just give up.
B
To Brad, at least with RTM the Lessee can remove the long term financial heat from the opposition. They lose their mark-up for placing Buildings Ins, they lose their mark-up for “Works” in particular Unqualified ones, they can no longer add on additional Fees say for Admin. In short you leave them with nothing but the Ground Rent, which is only payable to a Ground Landlord. The historical for this has never been played out. There is only a small window of opportunity here as to being an actual Landlord -v- a Ground Landlord. Admittedly those of the Gentry do retain the right of Title and to charge but only if they are a full on Feudal Landlord and even then their powers were restricted after 1290. Those who recognise the concept of reducing their oppositions financial heat by doing their own personal research will realise there is a get-out-of-jail card. Finally with only the Ground Rent left, when it comes to putting in for attempting to buy the Freehold the price is vastly reduced as they can not add in any “extras”…. It is unwise to extend the years of any Lease 1st as all you are doing is extending the problem – follow the money.
Shares in UK Housebuilders fell following reports, the government is examining Persimmon’s practices under the Help to Buy (HTB) scheme for first-time buyers. Persimmon saw its stock fall by more than 8%, whilst competitors’ shares, Berkeley, Barratt & Taylor Wimpey, were also down.
It followed a report in The Times at the weekend which claimed Persimmon could be stripped of its right to sell properties under the scheme amid allegations of poor standards and hidden fees.
It said the housing secretary James Brokenshire was concerned by the FTSE 100 firm’s activities – which includes the sale of properties on leasehold terms, including ground rent.
Profits per home almost tripled since 2012 – before HTB began, helping those with a 5% deposit access a loan of up to 20% of purchase price, or 40% if the property is in London.
The company’s participation in the scheme also fuelled flames of investors anger over pay awards.
The row culminated in the chief executive Jeff Fairburn being forced out last year as the company signalled it wished to move on from “distractions” over his pay and bonuses totalling £75m.
He is yet to be replaced though more information could be revealed in the company’s full-year results, which are due to be presented to the City on Tuesday. Persimmon refused to comment while the government, was yet to comment on the Times Report.
Trevor Bradley
Just a clarification people –
The Help To Buy Scheme is not just for first time buyers. It can be used by any suitable applicant as long as they don’t own another property. So if you have just sold your house you can pocket thousands and use HTB (that’s a very low deposit) to buy a new house.
This is where the builders WIN – The HTB scheme can only be used to purchase a brand NEW property.
If HTB had been applicable to First Time Buyers Only, and only for FREEHOLD houses I don’t think these builders would have had it anywhere near as easy to sell leasehold like they have.
HTB is really” Help To Sell” for to the builders advantage when it comes to leasehold (which are totally unnecessary in most cases).
Yet another failing by the government not realising what they had created when they introduced such a he scheme – or, bearing in mind how long they are taking to sort it, was it intentional so they (the government) could encourage the builders to build knowing there was a scheme to help their sales!
B
Thank you for clarifying an area of HTB that I never fully understood. It now makes sense as to where, why & how this has worked as an enabler for pocket lining. I never understood why HTB seemed only aimed at New Builds and how/why the net was never extended to 2nd Properties, which in the main are a far better standard, than modern buildings which now appear to have been built intentionally sub-standard, so as to create an intentional residual money spinner (Future Monies) when the Freeholds are flogged off without being offered to the Lessee.
Edward Whelan
Your posting for RYNEW PROPERTY is misleading because they have now abandoned that name and re-launched as THE HABITARE GROUP.
admin
Rynew listing has been removed and we are seeking an explanation from its directors.
Persimmon is to make a £1 billion profit thanks to taxpayers pouring in money through Help To Buy to get young first-timers onto the property ladder.
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I think we should discourage everything except RTM because RTM is all there will ever be in our lifetime.
Lets all just give up.
To Brad, at least with RTM the Lessee can remove the long term financial heat from the opposition. They lose their mark-up for placing Buildings Ins, they lose their mark-up for “Works” in particular Unqualified ones, they can no longer add on additional Fees say for Admin. In short you leave them with nothing but the Ground Rent, which is only payable to a Ground Landlord. The historical for this has never been played out. There is only a small window of opportunity here as to being an actual Landlord -v- a Ground Landlord. Admittedly those of the Gentry do retain the right of Title and to charge but only if they are a full on Feudal Landlord and even then their powers were restricted after 1290. Those who recognise the concept of reducing their oppositions financial heat by doing their own personal research will realise there is a get-out-of-jail card. Finally with only the Ground Rent left, when it comes to putting in for attempting to buy the Freehold the price is vastly reduced as they can not add in any “extras”…. It is unwise to extend the years of any Lease 1st as all you are doing is extending the problem – follow the money.
Persimmon shares hit over Help to Buy scrutiny
Shares in UK Housebuilders fell following reports, the government is examining Persimmon’s practices under the Help to Buy (HTB) scheme for first-time buyers. Persimmon saw its stock fall by more than 8%, whilst competitors’ shares, Berkeley, Barratt & Taylor Wimpey, were also down.
It followed a report in The Times at the weekend which claimed Persimmon could be stripped of its right to sell properties under the scheme amid allegations of poor standards and hidden fees.
It said the housing secretary James Brokenshire was concerned by the FTSE 100 firm’s activities – which includes the sale of properties on leasehold terms, including ground rent.
Profits per home almost tripled since 2012 – before HTB began, helping those with a 5% deposit access a loan of up to 20% of purchase price, or 40% if the property is in London.
The company’s participation in the scheme also fuelled flames of investors anger over pay awards.
The row culminated in the chief executive Jeff Fairburn being forced out last year as the company signalled it wished to move on from “distractions” over his pay and bonuses totalling £75m.
He is yet to be replaced though more information could be revealed in the company’s full-year results, which are due to be presented to the City on Tuesday. Persimmon refused to comment while the government, was yet to comment on the Times Report.
Just a clarification people –
The Help To Buy Scheme is not just for first time buyers. It can be used by any suitable applicant as long as they don’t own another property. So if you have just sold your house you can pocket thousands and use HTB (that’s a very low deposit) to buy a new house.
This is where the builders WIN – The HTB scheme can only be used to purchase a brand NEW property.
If HTB had been applicable to First Time Buyers Only, and only for FREEHOLD houses I don’t think these builders would have had it anywhere near as easy to sell leasehold like they have.
HTB is really” Help To Sell” for to the builders advantage when it comes to leasehold (which are totally unnecessary in most cases).
Yet another failing by the government not realising what they had created when they introduced such a he scheme – or, bearing in mind how long they are taking to sort it, was it intentional so they (the government) could encourage the builders to build knowing there was a scheme to help their sales!
Thank you for clarifying an area of HTB that I never fully understood. It now makes sense as to where, why & how this has worked as an enabler for pocket lining. I never understood why HTB seemed only aimed at New Builds and how/why the net was never extended to 2nd Properties, which in the main are a far better standard, than modern buildings which now appear to have been built intentionally sub-standard, so as to create an intentional residual money spinner (Future Monies) when the Freeholds are flogged off without being offered to the Lessee.
Your posting for RYNEW PROPERTY is misleading because they have now abandoned that name and re-launched as THE HABITARE GROUP.
Rynew listing has been removed and we are seeking an explanation from its directors.