Barratt signs UK cladding pledge; expects £350m-£400m provision

6th Apr 2022 13:46

(Sharecast News) - Barratt Developments has become the latest housebuilder to add its name to a UK government pledge to make properties safe following the Grenfell Tower fire.

The company said on Wednesday that it expects to make a provision of between £350m and £400m as a result.

This will cover initial reimbursement of costs incurred by the Building Safety Fund and Private Sector ACM Cladding Remediation Fund, which are estimated at £35m, and are likely to be settled in the current financial year ending 30 June 2022. It will also reflect the current and future availability of remediation resources including fire safety expertise, solution design and the delivery of the remedial build solutions.

The remediation programme is expected to be delivered within three to five years, Barratt said, "with building safety considerations paramount in the prioritisation and scheduling of works".

Barratt plans to seek recoveries from other entities involved in the development process who may have a responsibility to share the costs of remedial works, however this recovery is uncertain and therefore has not been included in its expected incremental costs.

Chief executive David Thomas said: "We have always been clear that we do not believe leaseholders should pay for remediation of their homes and are committed to helping affected leaseholders living in the buildings we developed. Through constructive engagement between industry and Government, a proportionate and sensible approach has been found and we look forward to completing the remediation process as quickly as possible.

"As well as committing to remediating buildings we were responsible for developing, we will be paying around £400m over the next ten years through the Residential Property Developer Tax to help fund remediation of buildings built or refurbished by other organisations. As Government continues to work through policy developments in this area, it is vital that it considers the burden of this taxation on UK housebuilders and how it might impact the ongoing construction of homes that the UK needs."

Taylor Wimpey, Persimmon, Berkeley, Redrow, Crest Nicholson and MJ Gleeson have all signed the pledge.