Cladding repair bill hits £1.5bn as Redrow and Barratt latest builders to sign up to fire safety pledge
The total cost for cladding works for the big nine listed housebuilders has hit £1.5bn, as London-listed firms sign up to a government fire safety pledge.
According to analysis from AJ Bell, the country’s biggest builders are planning to set aside another £802m in total to tackle unsafe buildings in the wake of the Grenfell Tower fire.
Developers had already set aside provisions for £939m.
Baratt Developments was the latest builder to outline on Wednesday afternoon how much it was facing to repair unsafe homes. The developer estimated some £350m to £400m in extra costs – this figure comes on top of a £184m sum already provisioned.
It comes as FTSE-250 firm Redrow revealed it was setting aside an extra £164m on Wednesday morning, following the footsteps of Persimmon and Taylor Wimpey earlier this week. This brings Redrow’s total bill to £200m.
AJ Bell investment director Russ Mould said: “Minister Michael Gove and unhappy householders may be pleased but shareholders may not be too perturbed as those nine firms had £5.5bn in net cash on their balance sheets at the last count and analysts expect them to rack up an aggregate operating profit of more than £5bn in their current financial years.”
The department for levelling up, housing and communities (DLUHC)’s building safety pledge commits housebuilders to fix dangerous cladding and other fire safety issues in buildings over 11 metres.
It is understood that the government has asked some 50 builders to sign the pledge, with most expected to agree to the commitments in this phase.
Taylor Wimpey revealed it was signing up to pledge on Tuesday afternoon, revealing it would inject a further provision of around £80m into remediations.
This would bring the total amount Taylor Wimpey has provided for fire safety remediation works to around £245m.
Taylor Wimpey boss Pete Redfern, said: “Today we confirm that Taylor Wimpey has signed up to the government’s fire safety pledge for developers. 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.”
In an update on the London Stock Exchange on Tuesday morning, FTSE 100 firm Persimmon said it would address “life critical” fire safety issues in England on homes developed by the group in the 30 years prior to 5 April.
However, the developer said it believed a previously announced £75m provision set aside for the works “remains appropriate”.