Housebuilders saw their share prices lifted on Monday after optimism that the bill foisted on developers for cladding remediations would be much lower than initially forecast.
It had been thought that property firms would have to pay £4bn to rectify unsafe cladding on 11-18metre tower blocks.
However, the potential bill was estimated to be closer to £1bn in a review commissioned by the House Builders Federation, the Sunday Telegraph reported.
Persimmon shares rose six per cent while Barratt Developments was up three per cent on Monday afternoon.
FTSE 100 Taylor Wimpey’s share price was also boosted more than three per cent.
According to the Sunday Telegraph, the research carried out by PwC is set to put final cost projections at a sum lower than £1bn.
Housing minister Michael Gove has given house builders a deadline of the end of this month to agree on how to pay for the removal of dangerous cladding. The government has threatened to impose legal requirements to force developers to pay.
An announcement could come as early as this week, the Sunday newspaper reported.
Building safety was pushed to the top of Londoners’ agendas last week after a blaze at a tower block near Aldgate East station where glass shards of the building fell into the road below.
Under Gove’s building safety bill, new powers will mean cladding producers can be sued and fined for defective products.
The measures come in the wake of the Grenfell Tower fire in 2017 where 72 people lost their lives.
Leaseholders who live in buildings higher than 11m will not be made to pay to fix dangerous cladding, the government has said.
Cladding campaigners have said the building safety issue extends far beyond cladding, with other unsafe features such as timber balconies also causing big issues for leaseholders.