You are viewing 1 of your 1 free articles
Bellway warns of ‘significant’ extra costs as fire safety bill hits £187m
Bellway has warned that it could face a “significant” extra provision on top of the £187m it has already set aside for fire safety works if the government pushes ahead with plans to make developers fix the cladding crisis.
The FTSE 250 housebuilding giant revealed today that it has set aside another £22.1m for remediation work, bringing the total it has allocated to fixing defects since 2017 to £186.8m.
However it said the government’s aim to allow building owners and leaseholders to demand compensation from a developer for safety defects up to 30 years old was beyond its normal warranty period of around 12 years.
“If agreed, it would broadly require Bellway to extend the period covered by its review by a further 18 to 20 years and would result in a significant, additional provision,” the company said in its half-year results today.
The firm flagged that it has “a long history of building apartments, particularly in the mid-2000s, when some 50% of output was flats”.
READ MORE
Government officials and developers have been in dialogue since housing secretary Michael Gove announced in January a move to force developers and house builders pay for cladding costs on buildings between 11 and 18 metres in height, estimated at £4bn.
Developers were given an extended deadline until the end of this month to agree on how to pay for the removal of unsafe cladding after Mr Gove said that the industry’s current proposals “fall short”.
Bellway said today: “We are engaging positively with government to establish a workable, sector-wide solution towards more widespread fire remediation issues and are in ongoing discussions in that regard.”
It added: “We take very seriously the issue of building safety and agree with the principle that residents should not have to fund life-critical fire safety remedial works.”
The firm revealed that the £186.8m set aside so far is across 33 developments, with 24 of them in London. A total of 21 of the buildings are above 18 metres tall.
Work has been completed on four of the developments and is under way on 13 sites, with three in the design stages, the company said.
Bellway was the developer for the six-storey Samuel Garside House in Barking, east London, where a devastating fire in 2019 destroyed eight flats and led to 61 people evacuating their homes and two people being treated for smoke inhalation.
The firm said today that a total of £29.7m has so far been recovered from third parties relating to fire safety issues in its schemes.
It said it will “continue to pursue further recoveries from suppliers, sub-contractors and professional advisors, where they have fallen short of the standards required”.
In the six months to the end of January, Bellway reported a 10% jump in pre-tax profit to £307.6m. Revenue rose 4% to £1.78bn.
Shares in the group fell around 5% but have since recovered slightly to 2,530p.
Sign up for our development and finance newsletter
Already have an account? Click here to manage your newsletters
