How taxpayers helped builder to £516m profit
A TAXPAYER-funded scheme has helped profits at Britain’s biggest housebuilder soar to more than half a billion pounds in six months.
Persimmon – whose boss was dubbed ‘Mr £131m’ over the potential size of his bonus – said it sold 4,000 homes to families using government-backed Help to Buy loans in the first half of this year.
The figure represented about 60pc of homes the company sold to private buyers, boosting its sales in the period to £1.8bn and profits to £516m. it comes after official figures showed thousands of wealthy families were taking advantage of Help to Buy, even though it is aimed at struggling first-time buyers.
Critics say the scheme is failing to help people who need it most while pushing up house prices and boosting profits and pay at Britain’s builders.
Almost 170,000 families have now taken advantage of Help to Buy since its launch in 2013. Reuben Young, a spokesman for campaign group Priced Out, said: ‘Huge profits of large developers are being propped up by the government’s ill-advised Help to Buy scheme.
‘Although it helps the lucky few who make use of it, Help to Buy pushes homeownership even further out of reach for everyone else, as it pushes prices even higher.’
Persimmon’s bumper profits were 13pc higher than the same period last year, with the company saying it continued to see robust sales despite fears of a slump in the market.
But it has come under fire in recent months for handing executives huge pay deals while it effectively benefits from taxpayer subsidies.
Chief executive Jeff Fairburn has already picked up £44.9m through a controversial bonus scheme, taking his total pay last year to £47m.
The 52-year-old was yesterday given access to the second and final tranche of shares through the scheme, worth another £37.8m.
At one point, Fairburn’s pay out looked as though it would be worth £131m, earning him his nickname.
However, the married father of three later agreed to give up a chunk of the bonus, and the total size of the payout is dictated by the company’s share price. Fairburn has pledged to give a sizeable amount of the award to charity.
Under the same bonus scheme, Persimmon has handed around £500m of shares to 133 senior figures this year overall.
Bosses have always insisted they did not realise how much they would end up receiving.
But after a furore last year, chairman nicholas Wrigley resigned over his role in drawing up the scheme.
Yesterday, Fairburn said: ‘We have continued to experience good levels of customer interest in our housing development sites as we trade through the quieter summer season. Customers are continuing to benefit from a competitive mortgage market and confidence remains resilient based on healthy employment trends and low interest rates.’
Persimmon also said it had taken advantage of the prolonged hot summer weather to push on with its building plans and make up for delays caused by the snow and freezing conditions earlier this year.
its average private sale price rose 4.4pc to £223,308.