Some the UK’s biggest housebuilders have signed up to the government’s building safety pledge that ensures leaseholders in blocks above 11 metres are not responsible for paying for cladding remediation. The government has asked 53 companies to sign up to the pledge.
This follows clauses within the government’s Building Safety Bill covering legal powers to block developers that refuse to pay from further development, by refusing them planning permission and building control sign-off in future.
The first developer to announce it would sign up to the pledge was Crest Nicholson, followed developers such as by Taylor Wimpey, Persimmon, Berkeley, Gleeson, and Redrow. A Department for Levelling Up, Housing & Communities spokesperson has said “powers [exist] to impose a solution in law if those in scope do not do the same”. Gleeson said:
“[The DLUHC has asked 53 companies] to sign a pledge confirming that they will take responsibility for performing or funding mitigation works to address life-critical fire safety issues on buildings over 11 metres in which the company had some involvement in developing and to secure withdrawal of those buildings from the Building Safety Fund and ACM Funds.”
In a stock market statement to shareholders on Tuesday morning, Crest Nicholson said:
“The board of Crest Nicholson today announces that it has confirmed to DLUHC its intention to sign the Building Safety Pledge, which it believes is in the best interests of the group, taking further steps to support those living in affected buildings.
As a result of making these new commitments, the group will need to record a further exceptional charge in its financial statements.
This is a complex and judgemental area, and the group will continue to work at speed to refine its latest estimate of these costs.
As such the board consider that a charge in the range of £80m to £120m currently represents its best estimate of this further liability.”
Taylor Wimpey is also expected to spend £80 million, taking its total to £245 million. Persimmon has set aside £75 million. Redrow has already committed £36 million in funding, but says it will have to set aside a further £164 million. Berkeley has not confirmed the funds it has set aside, though a fund of £129 million exists that reportedly includes fire safety.
Many of the UK’s largest developers are still to sign up, such as Keepmoat Homes, Vistry Group, Bellway, Bovis, and Miller Homes.
This comes after long negotiations between Michael Gove and the Home Builders Federation. Gove announced that those who could afford to pay would be made to do so in February. It was reported at the time that Persimmon had taken legal advice from Lord Pannick QC over whether Gove was breaking the law by demanding that developers pay to fix fire-safety problems, or be shut out of the property market. Other housebuilders also threatened legal action.
Firms will not be given access the government’s Building Safety Fund for the remedial work, though reports suggest the housebuilding sector will not have to contribute to a £4billion cladding remediation fund.
Firms have also agreed to remediate buildings going back 30 years, an extension on the previously discussed period going back to 2000.
