Time to cel­e­brate for York home builders

York­shire-based house builder Per­sim­mon cel­e­brates its 40th an­niver­sary this year. Sharon Dale talks to group chief ex­ec­u­tive Mike Far­ley.

Yorkshire Post - Property - - PROPERTY -

SET against the back­drop of re­ces­sion and a mort­gage squeeze you may won­der why Per­sim­mon Homes is about to pop the cham­pagne corks for its 40th birthday in Septem­ber.

It’s not mid­dle-age mad­ness, just plenty of rea­sons to cel­e­brate.

The credit crunch and eco­nomic slump fin­ished off many de­vel­op­ers, so the fact the York-based busi­ness has sur­vived is rea­son enough to re­joice and what’s more there are signs that it is start­ing to thrive once more.

Per­sim­mon Homes en­joyed a strong start to 2012. Spring saw 10 per cent more vis­i­tors to the sites and sales were up nine per cent year on year.

The com­pany is vir­tu­ally debt free and prof­itabil­ity is ris­ing, as is re­cruit­ment.

Founded in York in 1972 by life pres­i­dent Dun­can David­son, it has also re­tained its sta­tus as one of the largest and most suc­cess­ful house builders in the UK with north, south and cen­tral di­vi­sions com­plet­ing about 10,000 prop­er­ties a year. Over the last 40 years it has built 200,000 homes.

The firm is a sea­soned vet­eran of re­ces­sions, though none have been as long or se­vere as this, and the man who has guided it through the dark days is Mike Far­ley, group chief ex­ec­u­tive since 2006.

Mike, 58, who joined Per­sim­mon in 1982, says: “This is the worst re­ces­sion we have ex­pe­ri­enced by far and it is still a very dif­fi­cult mar­ket out there. Luck­ily we re­sponded quickly right at the be­gin­ning and that’s why we have weath­ered the storm. The mar­ket fell way in 2008 and we made some tough de­ci­sions very early on. We closed some of our of­fices, we didn’t start new sites, we slowed down the land buy­ing and we re­duced the work­force by half.

“It was all about cash con­ser­va­tion. We had debt in 2008 of £1.2bn and now we are vir­tu­ally debt-free.”

Mike, a car­pen­ter’s son from Lon­don, took a hands-on ap­proach and still spends a great deal of time trav­el­ling the coun­try vis­it­ing build­ing sites.

“I deal with the fig­ures and the num­bers but I like to see what’s hap­pen­ing on the ground. That’s where the ac­tion is.”

Things have changed a lot since he started work­ing life as a site en­gi­neer in the 1970s.

Plan­ning is­sues are much more com­plex, he says, and sales and mar­ket­ing is far more cus­tomer fo­cussed.

“We used to sell from a por­ta­ble build­ing back then and now you have to have a show house and you help peo­ple or­gan­ise mort­gages.”

He also re­calls that even in the early 80s, cen­tral heat­ing was an op­tional ex­tra for most prop­er­ties. Now it is es­sen­tial, as are en-suites and open plan liv­ing spa­ces.

What hasn’t changed, he be­lieves, is a pref­er­ence for tra­di­tional ar­chi­tec­ture and de­sign.

“Most buy­ers want a tra­di­tional de­tached house with a garage at the side,” he says, adding that in the boom they weren’t al­ways able to pro­vide that. Plan­ning rules in­sisted on high-den­sity town­houses on many sites.

“We were made to build town­houses back then but things are chang­ing and I am pleased to see that in the new Na­tional Plan­ning Pol­icy Frame­work there is a pre­sump­tion in favour of de­vel­op­ment. As a na­tion we are not build­ing enough houses. We built 110,000 last year but we needed 240,000.”

All new builds have to be more en­ergy ef­fi­cient and meet the gov­ern­ment’s code for sus­tain­able homes. Per­sim­mon uses con­ven­tional brick and block con­struc­tion, but a third of its homes are built with closed panel tim­ber frames, which are pre­fab­ri­cated then clad with brick or stone on site.

Use of this Space 4 sys­tem looks set to in­crease as pres­sure for draught-free, highly in­su­lated build­ings in­creases.

Sales too look set to rise, though steadily, says Mike, who is pre­dict­ing over­all growth for the new-build sec­tor.

“It will be mod­est over the next two or three years and that’s fine. We don’t want an­other boom and we have to make sure af­ford­abil­ity is right, though I think there will be some price growth due to the short­age of hous­ing.”

Per­sim­mon aims to make a size­able dent in that. It has 60,000 plots in its trade­mark safe, subur­ban ar­eas, which will keep it go­ing for six to eight years, and it is steadily ac­quir­ing more for its land bank.

It is part of a ten year ac­tion plan to take the firm to its 50th an­niver­sary. There is also a pledge to re­turn £1.9bn of sur­plus cap­i­tal to share­hold­ers through div­i­dend pay­ments over the next decade.

The de­ci­sion fol­lowed Per­sim­mon’s fore­cast that it will cel­e­brate 2022 with higher sales and en­hanced mar­gins.

“The plan is that Per­sim­mon will be big­ger, bet­ter and will stick to its core value of build­ing fam­ily homes,” says Mike.

Char­i­ties could ben­e­fit from a com­pe­ti­tion launched to mark Per­sim­mon Homes’ 40th birthday. One UK char­ity will win a de­tached house worth £250,000. There are 23 run­ners up prizes of £6,000. Visit www. per­sim­mon­homes.com/40. The win­ner will be an­nounced in Septem­ber.

AT­TEN­TION TO DE­TAIL: The once-derelict farm­house has had a stun­ning makeover and is now a lux­u­ri­ous fam­ily home with pe­riod fea­tures.

TUR­BU­LENT TIMES: Mike Farley has helped guide Per­sim­mon through the re­ces­sion, mak­ing tough de­ci­sions early on when the mar­ket fell.

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