Jarvis, which has posted three profit warnings in the past two years, has failed to impress analysts and was widely expected to appoint an outsider to the role.
Chairman Colin Skellett said there had been many high-calibre applicants but Kendall's knowledge of the group and his industry experience made him the outstanding candidate.
Kendall has been standing in as finance director since Lafferty was made head of Jarvis Accommodation last June.
He was company secretary from 1995-99 before becoming director of finance.
Kendall, who trained as an accountant with KPMG Peat Marwick, was finance director of contractor Shephard Hill from 1989-95 Adding to Jarvis' difficulties was a dispute with its biggest client, Railtrack, and a spat with its former auditor, Pricewaterhouse Coopers. Jarvis' share price peaked at 800p in 1998 but this week was 270.5p.