Persimmon PLC, one of the U.K.'s largest homebuilders, is investing more than £150 million to address a surge in complaints from customers about the quality of its houses.
The company is pumping an additional £140 million on quality control measures during its construction process and about £15 million on customer care. The move follows the announcement in April of an independent review of the company's customer care procedures.
Persimmon has faced widespread and well-publicized complaints from customers who have been disappointed at the quality of the homes they have bought from the company. The quality of the company's homes was the subject of a documentary on U.K. national television in July, in which the company apologized "without reservation" to dissatisfied customers.
CEO Dave Jenkinson said the investment was a targeted move. "This isn't about throwing money at things like a drunken sailor," he said during a first-half earnings call. "This is about having the right work in progress on the ground [and] having the right processes because we know it works and we can do it.
"We sacrificed 500 completions to make this happen," Jenkinson said. "That is not something you take lightly. That is a lot of money. Let no one be in any doubt and we believe in what we're doing here and we believe it's going to work."
In an attempt to reassure customers about the quality of its homes, Persimmon introduced a payment retention scheme for customers in July that extends cover to include any faults identified during the first week of occupation. The scheme allows 1.5% of a home’s value to be withheld by the buyer's solicitor until any build faults are resolved.
"This is a groundbreaking move, isn't it?" said Mike Killoran, group finance director. "I mean, who else is offering retention in the sector."
Persimmon's profit from operations for the six months ended June 30 totaled £506.0 million, down 1.5% from £513.8 million in the prior-year period. The company sold 7,584 new homes during the six-month period, down from 8,072 new homes in the same period in 2018.
