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House builders’ cladding proposals to cost Vistry up to £50m
Proposals put to the government by the Home Builders Federation (HBF) that would see its members meet some of the costs for fire safety remediation work would cost a major house builder £35m to £50m, it has estimated.
Proposals put to the government by the Home Builders Federation that would see its members meet some of the costs for fire safety remediation work would cost a major house builder £35m to £50m #UKhousingIn its annual results, Vistry Group said it supported the proposals, which were sent to the government by the HBF last Friday.
In 2021, Vistry took a charge of £5.7m to cover fire safety work, bringing the total amount held by the end of the year to £25.2m.
However, the house builder said it was difficult to estimate how much more it expects to spend on fire safety given “considerable uncertainties” in this area, adding that the HBF’s plan would see it spend roughly £35m to £50m more.
The HBF’s plan, which was published on Friday, would see its members commit to funding the remediation of “critical” fire safety concerns on buildings taller than 11 metres that they have developed since the year 2000.
Its members, which includes all major UK house builders, would also withdraw from receiving government grant for remediation through the Building Safety Fund.
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The proposals were issued as a compromise to the government’s plans that would see developers forced to make contributions to a £4bn fund, alongside paying for the remediation of blocks they have built over the past 30 years that are taller than 11 metres where fire safety issues have been discovered.
In response to the HBF’s proposals, the government said developers “have not yet gone far enough”.
In its results, Vistry said the HBF’s proposals were “reasonable and proportionate”, adding that it was “engaging fully with the government and working with the HBF to deliver a solution”.
Vistry Group was formed in 2020 following a merger between Bovis Homes and Galliford Try’s housing business, Linden Homes.
Its subsidiary Vistry Partnerships, which partners with social landlords to develop homes, has reviewed more than 100 developments taller than 11 metres and has worked with clients to fix issues with 18 buildings, the results said.
Meanwhile, the Linden Homes legacy business has identified 62 developments over 11 metres where remediation works may be required.
The Bovis legacy business has limited exposure to the issue due to rarely developing buildings taller than 11 metres, with only two blocks identified for review so far.
Vistry’s results showed the group made a before tax profit of £364m, up 140% from £143.9m in 2020.
During the year it completed 6,551 homes (up 41%), including 1,660 affordable homes (up 68%).
The group said its partnership business had an “excellent year” as mixed-tenure completions increased by 41% from 1,479 homes in 2020 to 2,088 in 2021, including 904 joint venture properties.
Greg Fitzgerald, chief executive of Vistry, said: “Being a successful business is also about doing the right thing. We are acutely aware of the anxiety faced by leaseholders in properties requiring cladding and fire safety remediation, and we fully agree that the financial burden for this work should not rest with them.”
House builder Persimmon also published its results today, which revealed it has set aside £75m to pay for fire safety on 33 buildings.
It confirmed it will not claim money from the government’s Building Safety Fund and said it did not expect the government’s request to evaluate all buildings taller than 11m built in the last 30 years would lead to it discovering significantly more buildings with issues.
Persimmon reported a before tax profit of £966.8m, up 23% from £783.8m in 2020.
It completed 14,551 homes, up 7% from 13,575 in 2020.
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