Persimmon puts customers ahead of sales

On July 1, Persimmon became the first UK housebuilder to introduce a customer retention scheme
On July 1, Persimmon became the first UK housebuilder to introduce a customer retention scheme
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Housebuilder Persimmon has sacrificed sales in order to focus on customer service as the FTSE 100 firm ploughs on with plans to restore customer faith in its new homes.

The York-based firm is keen to get over a public row over complaints about the quality of its homes.

It launched a review of its business practices in April and decided to push back the timing of handovers to ensure houses were checked more thoroughly.

Sales of new homes fell 6 per cent in the first half of the financial year. The fall follows a new policy to only sell homes to customers when they are close to being fully built.

Persimmon’s chief executive Dave Jenkinson said: “In our first half we reduced our volume by 6 per cent and put customers before volume.

“We’re continuing that. Volume will drop a little bit in the second half. This is my number one priority.”

Over the six months, the number of completed sales fell to 7,584 homes. Persimmon expects a similar effect in the second half of the year, although it is likely to sell more houses as the market is more active in autumn and winter.

On July 1, Persimmon became the first UK housebuilder to introduce a customer retention scheme.

Under the new scheme the homebuyer’s solicitor withholds 1.5 per cent of the total home value (an average of £3,600 per home) until any faults identified are resolved.

“We’re really pleased we’ve been able to roll out the customer retention scheme, which empowers customers and makes sure we repair any issues they may have. It has been really well received by our customers,” said Mr Jenkinson.

Persimmon’s progress has resulted in the firm achieving the Four Star status level in the latest quarterly customer satisfaction survey results.

The firm said it is currently trending strongly ahead of the Four Star threshold.

In response to customer feedback, the group has launched a new business, FibreNest, to provide ultrafast, full fibre to the home broadband services.

“We’re really pleased we’ve been able to roll FibreNest out,” said Mr Jenkinson.

“We believe the internet is the fourth utility. We believe people moving to a new house should have access to modern speeds and full fibre, not copper.”

Persimmon said its broadband packages have attracted 3,350 customers.

The group said consumer confidence remains resilient despite the uncertainty around Brexit. It said real wage growth and strong employment levels in the UK had propped up the housing market.

“There’s a lot of stuff going on,” said Mr Jenkinson.

“What particularly pleases us is, even with all that going on, we’ve still been able to produce a good set of financial results and trading has been pretty robust.”

Analyst Clyde Lewis at Peel Hunt said: “Trading remains resilient and the solid forward order book provides some comfort as we move towards 2020.

“However, the outcome of the upcoming General Election will clearly have a large bearing on the outlook for the sector for 2020 and beyond.

“Sales rates in the period since the first half have been in line with the prior year and the group is fully sold for the current financial year.

“Cancellation rates are at historically low levels and pricing remains firm. With the ongoing focus on build quality and customer care, Persimmon has already achieved a four star rating in the latest quarterly HBF survey.”