Listed housebuilders including Crest Nicholson, Persimmon, Taylor Wimpey and Berkeley Group have agreed with government to sign a safety pledge, under which buildings with potentially combustible materials will be repaired.
The companies issued stock exchange statements on the Department for Levelling Up, Housing and Communities initiative on 5 April. Crest Nicholson told investors of its “intention” to sign the pledge and to put aside capital to remediate buildings of between 11 and 18 metres tall – in addition to that already earmarked for taller buildings.
“As a result of making these new commitments the group will need to record a further exceptional charge in its financial statements,” the company said. “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 also said it will need to make additional financial provisions of some £80m. Chief executive Pete Redfern said: “Our priority has been to ensure that customers in Taylor Wimpey buildings have a solution to cladding remediation. We took early and proactive action, committing significant funding and resources to address fire safety and cladding issues on all Taylor Wimpey affected apartment buildings.”
Persimmon said it has signed the pledge and that its management team believes a £75m provision set aside in February for the work “remains appropriate”.
Dean Finch, Persimmon’s chief executive, said: “More than 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.”
Berkeley said it had signed the pledge and would adhere to principles “under which life-critical fire-safety issues on buildings that they have developed of 11 metres and above will be remediated”.
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