Mon 2 Sep 2019, 04:38 AM | Posted by editor
LETTER from Mark Langabeer, Newton Abbot Labour Party member
Dispatches reporter, Liam Halligan, investigates shoddy standards and excessive profits by Britain’s second largest house builder, Persimmon.
The housing shortage stands at around four million. The Tory solution to the problem of too few homes at unaffordable prices has been the ‘help to buy’ scheme. On new builds, people can buy a house with a 5% deposit and 20% of the mortgage interest free for five years.
The cost of the scheme stands at around £12 billion and has provided big profits to the developers. Persimmon, the largest company that builds homes under this scheme, have seen a profits bonanza: on average £66,000 on each house sold, which equates to a 30 % rate of profit. At the same time, home owners under the scheme have complained about shoddy standards that include the failure to install fire barriers.
Professor James Summerville concludes that the drive for profits has come before quality and this is because of institutional investors like the major banks. Last year, Persimmons made £1 billion in profits and this was largely the result of the help to buy scheme. One in seven of all new homes are built under the scheme with Persimmon being the largest provider.
The programme also highlighted sharp practices of the company when selling the properties. Pressure on new owners to complete a sale before inspection and an independent survey of the properties is commonplace. Persimmon even fine new owners for failing to complete at the time of the company’s choosing.
The editor of Moneyweek described the current help to buy scheme as exploiting young people, taxpayers and Government. It also encouraged the building of substandard homes.
Listening to a mother of four, living in a converted shipping container on a radio talk show, just reveals the gravity of Britain’s housing crisis. Labour must bring the major property developers into public ownership and build social housing for all that need it.
