Building material manufacturers and property developers’ shares plummet on Monday morning as the government toughens up on firms unwilling to pay to fix unsafe homes.
Housing secretary Michael Gove threatened a UK trading ban on manufacturers of combustible cladding and insulation in a letter to the Construction Products Association.
In the letter, Gove said more than £700m in profit had been generated by three firms closely linked to the Grenfell Tower disaster of June 2017, where 72 people were killed in a fire.
The trio of firms are thought to be Arconic, Celotex and Kingspan, which made the combustible cladding panels and insulation foam on Grenfell Tower, where 72 people died after a fire in June 2017.
Kingspan shares were down almost nine per cent on Monday while Celotex’s French owner Compagnie de Saint-Gobain saw shares dip almost seven per cent.
Arconic shares were down more than one per cent.
Like developers, suppliers have been given a March deadline to cough up cash for a fund to fix fire safety defects on flats across the country.
Gove requested to meet with the construction sector’s trade body and said the total contribution from the cladding and insulation sector “must represent a significant portion of the total remediation costs.”
“A new deal must include a clear commitment from the sector that they agree to make financial contributions in this year and in subsequent years as we have already asked developers to do,” he wrote.
The government has estimated the cost to remediate unsafe buildings between 11-18m and buildings over 18m is around £4bn and £5.1bn respectively.
The minister said in the event that suppliers do not cough up, the government would be prepared to use its “ regulatory framework to limit any culpable company from operating and selling products in this country in the future”.
The country’s major developers also saw shares sink on Monday, with shares in Berkeley, Persimmon and Barratt down more than five per cent.
Other housebuilders, Taylor Wimpey and Bellway, saw shares dip around five per cent also.