6th Apr 2022 14:40
(Alliance News) - Barratt Developments PLC on Wednesday joined four other housebuilders in announcing that it has signed the UK government's Building Safety Pledge.
The deadline for signing the pledge was April 5.
The Building Safety Pledge programme was established by the UK government in the wake of the Grenfell Tower fire in 2017 to make sure that residents of high-rise buildings are safe by removing combustible materials, such as cladding. The pledge commits housebuilders to new guidelines for work on potentially unsafe cladding on buildings between 36 feet and 59ft high.
Remediating, or funding the remediation of buildings, will cost Barratt between GBP350 million and GBP400 million, the Leicestershire, England-based housebuilder explained. This follows a review of buildings above 11 metres, or 36 feet, developed by Barratt in England, Scotland and Wales in the last 30 years.
The incremental costs will be reflected within the company's Building Safety provision in its results for the year ending June 30, the firm said.
"We intend 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 our expected incremental costs," the firm added.
"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," Chief Executive David Thomas explained.
Earlier on Wednesday, peers Redrow PLC and MJ Gleeson PLC announced that they signed the pledge.
The improvements that Redrow will enact will cost the company an additional provision of GBP164 million, which will be "treated as an exceptional item in the results for the 2022 financial year," Redrow announced. This is on top of another, previous provision for fire safety in high rise buildings of GBP36 million, it said.
Redrow's additional provision is higher than what Persimmon and Crest Nicholson - who have also signed the pledge - reported on Tuesday, citing additional costs of GBP75 million and a range of GBP80 million to GBP120 million respectively.
Sheffield-based MJ Gleeson said it signed the pledge even though none of the buildings in development in which its legacy arm was involved with were over 11 metres tall, or 36 feet, for which the safety pledge rules apply.
Barratt Developments shares were 1.1% higher at 525.20 pence each in London on Wednesday afternoon. Redrow shares were down 0.4% at 523.00p and MJ Gleeson up 3.8% at 606.04p.
By Tom Budszus; [email protected]
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