Persimmon takes £75m hit on dangerous cladding costs
Persimmon will take a multimillion pound hit on costs associated with cladding safety issues that have been discovered since the Grenfell Tower tragedy.
The housebuilder said it has made a £75m provision in its 2020 results to pay for dangerous cladding to be removed or investigated at 26 high-rise buildings in its legacy development portfolio.
It has identified nine high-rise properties – more than 18 metres tall – that it has built where cladding may need to be removed, in-line with government guidance that has been updated since the Grenfell Tower fire in 2017.
Persimmon – which saw its share price dip one per cent following the announcement – does not own those buildings and the legal responsibility lies with the current owners.
However the housebuilder said it will provide “technical support to ensure the building is made safe” and is “ready to provide the support necessary to make sure the work is done” if the owner fails to act.
For buildings below 18 metres in height the government has recommended a risk-based approach.
Persimmon said it had identified 17 buildings below 18 metres that may be fitted with cladding requiring detailed investigation.
It will lead the investigation on the buildings it owns, and will support the owners of Persimmon-built properties.
Persimmon chairman Roger Devlin said: “The concern around now banned cladding is affecting many thousands of homeowners who live in high-rise buildings right across the country.
“At Persimmon we believe we have a clear duty to act to address this issue. So today we are setting aside £75m towards any necessary cladding remediation and safety work in 26 developments we built.
“Where we still own the building we will act. Where we no longer own them we will work with the owners to make sure they meet their legal responsibilities and duty. If the owner does not step up then we will act to remove uncertainty and anxiety for residents and make the buildings safe.
“This is a decision which we believe is not only right for residents but also the right thing for us to do as one of the leading housebuilders in the UK. We want Persimmon to be a business with a long-term, responsible and sustainable future and hope our actions today demonstrate a clear commitment to these values.”