The Mail on Sunday

Now Persimmon is under pressure to cancel ALL its leasehold deals

Builder’s out-of-court climbdown gives homeowners hope

- By Jamie Nimmo

HOUSEBUILD­ER Persimmon is under pressure to scrap all of its leasehold contracts after it reached an out- of- court settlement over alleged mis-selling.

The FTSE 100 giant – which is trying to restore its reputation after a bonus scandal and complaints about workmanshi­p – was accused of breaching trading standards after allegedly mis- selling dozens of homes on an estate in Cardiff.

A number of buyers at the St Edeyrn’s Village developmen­t complained they were not told the homes were leasehold. This meant they would have to pay ground rent and would be more likely to experience difficulti­es selling them compared to freehold properties.

Persimmon admitted its sales team had not been clear enough that the homes sold on the estate in 2016 and 2017 were leasehold.

In a letter to the Cardiff buyers sent earlier this month, Martin Smith, managing director of Persimmon’s East Wales division, admitted ‘we could have communicat­ed better or more clearly when you first moved in’.

Cardiff City Council, taking action through Trading Standards, dropped the case – which had been set for a seven- week trial next month – after Persimmon offered to give all leaseholde­rs on the estate the freehold title for free and to reimburse any ground rent paid.

Dave Holland, wrote to St Edeyrn’s residents last week on behalf of Cardiff City Council, saying it would now ‘not be in the public interest to pursue the matter to trial, given the inherent risks associated with this and the costs which would be incurred’.

Campaigner­s are arguing that thousands of other buyers making similar claims should receive the same offer without having to take Persimmon to court.

That would cost Persimmon millions of pounds and add to pressure on the company’s share price, which has fallen this year – especially compared to rivals. Persimmon is on track to make another £ 1 billion in pre- tax profits this year. Last week, it said it would spend an extra £ 15 million to improve build quality after criticism about shoddy workmanshi­p.

Last year, Dave Jenkinson – who made about £40 million from Persimmon’s controvers­ial bonus scheme before he was promoted to chief executive – defended how the company sold its leasehold homes. He told MPs he did not understand how buyers ‘would not know’ they were leasehold properties and said he was ‘not sure what more we can do’.

In June, the Competitio­n and Markets Authority launched an industry- wide investigat­ion into the potential mis-selling of leaseholds.

Katie Kendrick, founder of the National Leasehold Campaign, said she was disappoint­ed the Persimmon case was not going to court.

‘This case is of significan­t national interest,’ she said. ‘It is not an isolated case. Thousands feel they have been mis-sold their leasehold properties.

‘We urge Persimmon to honour this for all others across the country who are currently trapped in the leasehold scandal.’

Ashley Bishop, a 25- year- old homeowner at St Edeyrn’s who works at Ford’s Bridgend plant, said he was not told his house was leasehold ‘until the card machine was brought out’.

He said he was assured that all homes on the estate were leasehold but the firm later sold freehold properties. Ashley said Persimmon should be giving away freehold titles ‘to every other leaseholde­r they’ve put in the same situation’.

A Persimmon spokesman described the leasehold giveaway as ‘a goodwill gesture’. On calls to offer other leaseholde­rs the freeholds for free, he said: ‘We’ve given all our leaseholde­rs the right to buy the freehold which we own at a price which is capped at the market value.’

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