More housebuilders cut payment to subbies

Housebuilders Nicholas King and Persimmon have become the latest companies to make payment cuts to their supply chains.

Nicholas King Homes is asking suppliers for a reduction of 10% and three regional offices of Persimmon are asking for a 5% price reduction.

Managing director Nicholas King said the cuts were a response to uncertain conditions and were “just good business” for the housebuilder, which has been negotiating with suppliers via the telephone and meetings.

Persimmon has sent letters from its East Midlands office asking for a 5% reduction, while letters from its Charles Church division have gone out to suppliers in North London and Wales.

The letters suggest suppliers could make the cut by surrendering retention sums.

The revelations are the latest to emerge after Taylor Wimpey asked its supply chain for a 5% cut in payment on existing and future contracts.

It later emerged Barratt Homes was in negotiations to make cuts of up to 5% on a regional basis and Bellway had asked suppliers for a discount of 2.5%.

The National Specialist Contractor Council (NSCC) has asked subcontractors to send it any copies of letters asking for price reductions. It launched a Fair Payment Campaign last September.