Persimmon pulls incentives if home buyers don’t use its mortgage broker
Persimmon has admitted it doesn’t allow home buyers access to its incentives if they don’t use the builder’s panel of mortgage brokers, after cases were raised to our sister title, Mortgage Solutions.
Mortgage adviser White Financial Services highlighted two particular cases affecting its clients in the last nine months, including one this last weekend, where Persimmon confirmed incentives it had offered the customers wouldn’t be honoured unless they used its panel broker.
Incentives offered by Persimmon in the deals included alterations to the property, assistance with legal fees and discounts towards additional extras.
Mortgage Solutions has seen the registration form and email from a sales representative which confirmed these incentives would be removed if Persimmon’s broker wasn’t used in the two cases.
However, brokers have been raising concerns about the new build market for some time, fearful builders are restricting competition and choice by not allowing customers to use independent brokers.
‘Attitude smacks of arrogance’
Dan White, managing director of White Financial Services, said in the most recent instance, a Persimmon sales representative told customers that the builder wasn’t bothered if they walked away as the property would be sold anyway.
“For far too long developers have played the game and imposed their authority, appearing to show disregard for their buyers’ wishes,” he said.
“Threatening to withdraw incentives on their properties with an attitude that their demand far outweighs what they are selling smacks of arrogance. As a result, it has adopted an attitude where it thinks it can dictate and overrule their customers.
“If a property has a particular sales incentive that can be negotiated it should be down to the individual negotiation, not down to what cross services are used, especially when the cross services cannot always guarantee quality and results the buyer would expect from their own experienced broker,” he added.
‘Process requires experienced IFAs’
Persimmon Homes defended its decision to use a panel of recommended brokers. It said it required experienced advisers to guide customers through the complex process, adding there was clear communication to customers about the situation.
“There is no financial tie-up between our recommended panel of independent financial advisors and Persimmon Homes,” a spokesperson said.
“We do not offer incentives to use our recommended IFAs however we do not offer any discount or incentive where an unknown IFA is used.
“This is principally because the reservation process is time-related and requires experienced IFAs with the correct expertise in new build properties. That helps speed the process and accurately guide the purchaser through the process.”
“The main reason for recommending panel brokers is that certain mortgage products are only available to new build sector through our approved brokers.
“In this instance the reservation was taken with the purchasers having full knowledge that they would be using the recommended IFA.”
‘New build market is a specialist area’
Mortgage Select is the broker which handles Persimmon referrals in the area affected by the White Financial Services cases.
Managing director, Gareth Markham, told Mortgage Solutions he believed these sorts of arrangements were common for most builders, although his firm only had the one with Persimmon.
Markham also noted that he had no say in whether Persimmon allowed clients to take incentives when using different brokers.
“Persimmon wanted one broker to work in the area to cover mortgage referrals, so it’s whatever they want,” he said.
“I know they get messed around a lot by clients saying their broker can get deals done and they can’t, because the new build market is a specialist area really.
“There’s lenders’ incentive policies, mortgage offer expiry times, loan-to-value on new build, all those elements.”
Markham added he had seen a lot of brokers struggle with new build and not know how to approach it.
“If you don’t have prior knowledge of it and things like new build and Help to Buy, it is easy to get them wrong and severely detriment the client,” he said.
“So Persimmon see that and it’s why they use a broker that’s known to be ‘au fait’ with new build,” he added.