House builder returns to profit after recouping £12m for remediation work

Crest Nicholson is one of 54 developers that must resolve life-critical fire-safety defects in its buildings under an agreement made with the government in 2023.

Under the developer remediation contract, the builder must find and fix buildings they constructed or refurbished that meet certain criteria: in England, at least 11 metres high and constructed from 1992. 

As of April, Crest Nicholson has estimated that its remediation programme will cost £222.8m and it expects to have completed the work within five years.

So far, the developer has clawed back more than £30m from third parties for defective design and workmanship since it signed the contract with the government.

It is not the only house builder to have succeeded in recovering funds for remediation work. Last month, Inside Housing reported that Willmott Dixon returned to profitability in 2024 after retrieving £20m to fix cladding from contractors involved in historic building work.

Martyn Clark, chief executive of Crest Nicholson, said the company has “continued to make good progress” with its fire remediation programme. 

He explained that the firm is set to complete surveys of all 293 buildings covered by the developer remediation contract in time for the July deadline. 

Mr Clark also highlighted the £34m the builder spent in the past year on fire safety works, as well as the progress it has made pursuing third parties to recover costs. 

Crest Nicholson completed 739 homes in the six months to April – of which 197 were affordable, 107 were for the private rented sector and 435 on the open market. 

This was a slight drop on the 788 homes built last year, which the report said was due to a new strategy to increase profitability by focusing on open market homes in the mid-premium market. 

Mr Clark pointed to “some encouraging signs” in the UK housing sector.

He said: “Real wage growth and market expectations that interest rates are on a steady downward path are beginning to improve affordability.  

“The planning environment has become incrementally more positive, supported by recent government measures aimed at boosting housing delivery and easing bottlenecks in the planning system. 

“These combined factors are contributing to a gradually improving landscape for the housing market, offering a more supportive backdrop for the sector. However, we remain a long way from a buoyant market.”