Yorkshire housebuilder closes sites to protect workers

Housebuilder Persimmon is to close all of its sales offices from Thursday onwards and will start an orderly shutdown of its construction sites with only essential work taking place in response to the coronavirus pandemic.
Persimmon said it will continue with essential work only, making partly-built homes safePersimmon said it will continue with essential work only, making partly-built homes safe
Persimmon said it will continue with essential work only, making partly-built homes safe

The York-based firm’s chief executive Dave Jenkinson said the company’s primary concern was the safety and well-being of customers, staff, contractors and suppliers.

“We will listen carefully to the Government’s future advice as the situation develops and will make further adjustments where necessary,” he said.

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Persimmon joins other housebuilders, such as Bellway, Taylor Wimpey and Barratt Developments, in deciding to shut construction sites, despite being allowed to stay open, as they take positive action to help protect workers from coronavirus.

Persimmon said it will continue with essential work only, making partly-built homes safe, where customers could be left in a vulnerable position. The firm will continue to offer telephone and online customer support.

Bellway chief executive Jason Honeyman said the decision to shut its construction sites in spite of being exempt from the Government-imposed lock down came as a result of fears for worker safety.

“We weren’t convinced we could police the social distancing or keep workers two metres apart at sites,” he said.

“There’s always some people who ignore it.”

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The decision comes as pressure is mounting on Prime Minister Boris Johnson to order that all non-essential construction work is halted amid worries that workers travelling to sites will hamper efforts to stop the spread of the virus.

Retirement home specialist builder McCarthy & Stone confirmed it was pausing developments, but would keep open some sites that are close to completion.

Bellway cautioned it expects buyer demand to “almost cliff edge” as the UK locks down.

Persimmon warned it was “preparing for a significant delay in the timing of legal completions, a rise in cancellation rates and a material slowdown in new sales”.

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The firm also said it will cancel its 125p dividend which was due to be paid on April 2 and postpone the payment of 110p a share on July 6 to conserve cash.

Work on building sites has not been banned, but a Government order for people to maintain a safe distance of two metres apart is making it difficult for them to comply.

Housing minister Robert Jenrick said a number of building companies had concluded they could not follow the public health advice and were choosing to close down their sites.

Analyst William Ryder at Hargreaves Lansdown said: “We suspect Persimmon won’t be the last housebuilder to take drastic actions to keep cash in the business.

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“In our view, very few people are going to choose to buy a new house in the next few months. It looks like we’ll have to spend a chunk of the summer sitting at home, and many will be suffering financial hardship – hardly ideal conditions for house hunting.

“This means housebuilders risk facing the double danger of falling volumes and falling prices. Together, these twin threats can demolish profits and cash flow surprisingly quickly, and while we’re not at that point yet, the likelihood is rising.”

He said housebuilders will try to shelter behind their balance sheets, which are in much better shape than they were during the financial crisis.

“In the short term we think most of the major builders will manage, but if the disruption is prolonged even the strongest balance sheets will find themselves worn down,” he added.