Crest and Taylor Wimpey reveal hefty bills for cladding works after new pledge
The firms are among those to sign up to the Government’s new Building Safety Pledge in the wake of the Grenfell Tower tragedy of 2017.
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Your support makes all the difference.Housebuilders Crest Nicholson and Taylor Wimpey have revealed further hefty bills after vowing to carry out more fire safety works on tall buildings in the wake of the Grenfell Tower tragedy.
The firms are among those to sign up to the Government’s new Building Safety Pledge, which commits developers to new guidelines for work on potentially unsafe cladding on buildings between 36ft (11m) and 59ft (18m) high.
Crest said it expects a further charge from the commitments of between £80 million and £120 million, on top of a £47.8 million bill for the firm so far for cladding works since the year to the end of October 2019.
Given the group's well capitalised financial position and strong current trading performance, the board does not consider this to present a risk to current or future operations
Taylor Wimpey said it was putting by around another £80 million as a result of the pledge, taking its total so far for cladding works to about £245 million.
Fellow building giant Persimmon also confirmed it has signed up to the new building safety guidelines, but said it believes the £75 million already set aside by the group will be enough to cover the costs.
Housebuilders had until April 5 to sign the Building Safety Pledge guidelines.
It comes after reports on Monday that the Government had dropped its demands for housebuilders to contribute towards a £4 billion cladding remediation fund after talks with the industry.
Instead, developers must commit to carrying out work on the medium-rise buildings they have built over the past 30 years and pay for it themselves without claiming on the Government’s building safety fund.
Additional funding talks will be put off until later in the year.
Over a year ago we said that leaseholders in multi-storey buildings Persimmon constructed should not have to pay for the remediation of cladding and fire-related issues
The housebuilding sector is facing a ballooning bill following the Grenfell Tower fire, which killed 72 people in 2017.
The Government announced in January that all leaseholders in high-rise blocks should not have to pay for remediation works on dangerous cladding, including those in properties between 36ft (11m) and 59ft (18m) tall.
Since then, it has been in discussions with the sector over new guidelines.
Crest said it believes signing the Building Safety Pledge is “in the best interests of the group, taking further steps to support those living in affected buildings”.
It said that “failing to agree to these new guidelines would carry further consequences, implemented by DLUHC (Department for Levelling Up, Housing and Communities), that would impact the group’s ability to operate and trade normally within the housing market”.
Crest added: “The cash outflows required to remediate the affected buildings will occur over several years.
“Given the group’s well capitalised financial position and strong current trading performance, the board does not consider this to present a risk to current or future operations.”
We continue to believe this is an industry-wide issue involving many types of organisations and therefore needs an industry-wide solution
Dean Finch, group chief executive at Persimmon, said: “Over a year ago we said that leaseholders in multi-storey buildings Persimmon constructed should not have to pay for the remediation of cladding and fire-related issues.
“We are pleased to reaffirm this commitment today and sign the Government’s developer pledge.”
But Taylor Wimpey signalled it believes the pledge needs to be widened out.
“We continue to believe this is an industry-wide issue involving many types of organisations and therefore needs an industry-wide solution,” the group said.
A DLUHC spokesperson said: “Since January we have been clear in our expectations of developers, including an agreement to remediate buildings they have had a role in developing and to contribute to a wider fund to fix unsafe cladding.
“Our position has not changed. We welcome the developers who have signed pledges so far and we have the powers to impose a solution in law if those in scope do not do the same.
“We will provide an update on the outcome of negotiations in due course.”