Housebuilder Taylor Wimpey will pay out £125million to replace cladding and improve fire safety on all blocks built in the past 20 years in wake of Grenfell Tower disaster
- Money to be placed in fund ‘to provide certainty for customers and leaseholders’
- Ministers last month pledged £3.5bn to repair or replace cladding after Grenfell
- Taylor Wimpey said the fund would cover any block built in the past two decades
Housebuilder Taylor Wimpey will pay out £125 million to replace cladding and improve fire safety on all blocks built in the last 20 years in the wake of the Grenfell Tower disaster.
The money is set to be placed in a fund ‘in order to provide certainty for customers and leaseholders and to avoid them bearing the cost of investment to ensure their buildings are safe’, the company said.
It comes just weeks after ministers set aside £3.5 billion in funding to help repair or replace cladding more than three years on from the tragic fire in west London, which left 72 dead.
More than a million leaseholders face bills of up to £115,000 to fix unsafe homes and Housing Secretary Robert Jenrick told the Commons last month that those in blocks over 18 metres (60ft) high would no longer have to pay to replace flammable cladding.
But MPs and leaseholders reacted with fury at the news that loans costing up to £600 a year will be forced on hundreds of thousands of homeowners in low and medium rise blocks – potentially blighting resale values.
And all victims still face bills of tens of thousands of pounds to fix other defects, such as missing fire breaks and combustible insulation.
Today, Taylor Wimpey said the company fund would cover any block built in the past two decades, including those less than 18 metres tall which are not eligible for government grants.
The firm added it has identified 232 apartment buildings that may require fire safety works. It declined to reveal a list of the sites, however.
The tragic Grenfell Tower fire in west London in 2017 left 72 dead and has since sparked efforts to help repair or replace cladding
Housebuilder Taylor Wimpey said today it will pay out £125 million to replace cladding and improve fire safety on all blocks built in the last 20 years
Bosses made the announcement as they revealed a 36% fall in revenues in 2020 due to Covid-related hits to the business. Revenues hit £2.79 billion, whilst pre-tax profits fell 68% to £264 million.
But the company said it was confident the housing market will strengthen and will continue to actively buy land for future developments as orders for new homes increased.
It also announced a return of a dividend – handing out £151 million to shareholders or 4.14p a share.
Chief executive Pete Redfern said: ‘We are confident in the medium-term performance of the housing market and therefore accelerated our land purchases from May 2020 as high-quality land became available at attractive rates.
‘We are now focusing on driving efficiencies across the business, the rollout of our new house type range and implementing our ambitious new environmental strategy.
‘The UK housing market has been resilient and continues to reinforce our confidence in our outlook.
‘We are a cash generative business with a strong balance sheet, and we are pleased to announce today that we will reinstate our ordinary dividend in line with our aim of providing a reliable income stream to our shareholders.’
Speaking about the cladding fund, he told BBC Radio Four’s Today programme this morning: ‘The first set of buildings were identified a while ago through the initial review which focused on ACM [cladding] and all buildings over 18m, and of the 19 buildings 12 were completed and the others are in progress so we are well through them.
‘It’s important to understand that because the scope of this has widened as we’ve gone through the last 18 months.
‘We’re now largely talking about buildings under 20m and what we’re trying to do is pick up anyone who’s not covered by the government scheme, so that people who need what is known as an EWS1 form to certify their building safety, get a mortgage and move house, are covered by us today.
‘It will take time and the work has to be done and managed by the freeholder on behalf of the leaseholders, but what we’re saying is we will pay for that work to be done and, where appropriate, particularly where freeholders are small or don’t have the skills, we’ll provide them with assistance and advice.
‘What it does say most importantly to individuals who own individual apartments is that we will pick up the main capital part of the cost of that work, even though it goes beyond the original standards at the time they were built and brings it up to a current expectation.’
The announcement comes less than a month after rival housebuilder Persimmon announced it would spend £75 million to cover the costs of replacing unsafe cladding on 26 multi-storey buildings it had built.
Persimmon said it would book the charge in its 2020 results to cover its contribution for work on the buildings, with its full-year figures set to be announced on March 3.
Pete Redfern, chief executive officer of Taylor Wimpey, made the announcement earlier today
Housing Secretary Robert Jenrick (pictured) recently announced an extra £3.5billion to replace unsafe cladding on high-rise buildings
The Mail has previously called for all unsafe homes to be fixed by June 2022 and for leaseholders to be spared all of the crippling financial burden.
Just 216 out of a possible 11,760 dangerous buildings have been fixed since the Grenfell tower inferno killed 72 in June 2017.
The Government has said its overall pot of £5billion will ensure that leaseholders in high-rise buildings will not have to pay to replace unsafe cladding similar to that on Grenfell.
But inspections carried out in the wake of the disaster have identified hundreds of buildings with safety defects apart from cladding, such as missing fire-breaks and timber balconies.
These faults are excluded from the Government fund – and the housing ministry has inserted a contract clause that says leaseholders cannot claim aid for cladding repairs without proving they have ‘sufficient funding … to complete all the works’.
The clause in the contract makes clear these works cover non-cladding related safety defects.
The average cost per flat of replacing unsafe cladding is estimated to be £22,500 and leaseholders face another £25,600 bill for other defects, according to the Association of Residential Managing Agents (Arma).
Ministers have said building owners – not leaseholders – should pay these bills.
However, critics say this is meaningless because leaseholders are legally liable.
Clive Betts, Labour chairman of the Commons housing committee, said the clause was ‘outrageous’.
Meanwhile, more than 30 Tory MPs have also backed attempts to help homeowners lumbered with the cost of replacing faulty cladding in the wake of the disaster.
Downing Street last week claimed that Steve McPartland’s amendment to the Fire Safety Bill – which returns to the Commons tomorrow- would ‘slow things down’ as it introduces new rules governing repairs to high-rise homes.
It comes after the public inquiry into the Grenfell disaster heard last month how a technical manager at the tower’s cladding supplier told staff that poor fire test results on the product needed to be kept ‘very confidential’.
The request was sent in capital letters in 2010 by French national Claude Wehrle, a manager of cladding giant Arconic who has refused to come to Britain to give evidence to the inquiry on the London blaze.
A sales director, Guy Scheidecker, responded ‘this shouldn’t even have been mentioned’ – causing Claude Schmidt, the president of the corporation’s French arm, to admit the email suggests customers had been misled.
When asked by the inquiry’s chief counsel Richard Millett QC why ‘deception was being practised on your watch’, he said he could not explain it.
The Grenfell Tower Inquiry heard that Arconic’s cladding panels – polyethylene (PE) panels – formed the system used at the tower in North Kensington and have been blamed for the rapid spread of the fire which killed 72.
It also emerged that multinational corporation Arconic did not alert customers to the dangers of one of its products following a huge fire in Bucharest in 2009 because nobody died in the blaze.
Could cladding scandal trigger new bank crisis? Finance industry could see widespread mortgage defaults if leaseholders are forced to pay for safety repairs, MPs are warned
The building safety scandal could lead to the next banking crisis if leaseholders are forced to pay for repairs, MPs were warned yesterday.
Former Bank of England economist Dean Buckner said widespread mortgage defaults could spark a Northern Rock-style run on the banks.
His dire warning came after campaigners told the Commons Housing Select Committee that ministers needed to ask them for a spreadsheet of building safety data because they ‘had no handle’ on the scandal themselves.
A general view down the Thames path towards the Royal Artillery Quays which has the same flammable cladding that caused the Grenfell disaster
Dr Will Martin, co-founder of the End Our Cladding Scandal campaign, had earlier told MPs that the Government had no idea how widespread the problem was
It piles further pressure on Housing Secretary Robert Jenrick, whose plans to end the crisis were blasted as a ‘betrayal’ of leaseholders by Tory MPs.
Mr Jenrick has set aside £5billion to replace unsafe cladding on buildings above 18 metres (60ft) in height.
But hundreds of thousands of families living in smaller blocks face bills of up to £600 a year.
Meanwhile, all affected leaseholders still face average costs of £25,600 each to fix non-cladding related defects. The Mail is campaigning to end the scandal.
Mr Buckner, who is now advising charity Leasehold Knowledge Partnership, told the select committee that unaffordable bills would cause borrowers to default on their mortgages.
He said this would erode capital lenders have set aside to ‘absorb losses’, adding: ‘If banks become clearly in trouble, that then affects all of us, because we all have money with banks.’
Mr Buckner later told the Mail that mortgage defaults could prompt banks to restrict lending to all borrowers, while some could even collapse as they did during the 2007-08 financial crisis.
He said: ‘If the market gets even a sense that this is happening, then you could get runs on the banks, such as we saw with Northern Rock and HBOS.
‘That is absolutely not out of the question.’ Mr Buckner said the Bank of England was ‘probably doing something about this already’.
Dr Will Martin, co-founder of the End Our Cladding Scandal campaign, had earlier told MPs that the Government had no idea how widespread the problem was.
He said ministers asked campaigners at a meeting in 2019: ‘Can we have your Excel spreadsheet with all of your building data on?’
Dr Martin, 32, who lives in a building in Sheffield with fire safety defects, added: ‘They have no handle on the scale of this problem – and they have no handle on the scale of all the other problems that are plaguing these buildings.’
The Government has identified 419 high-rise buildings with the same cladding as Grenfell Tower. It says 216 have been fixed.
But it still has not given a firm estimate of how many buildings have other forms of defective cladding.
A Government spokesman said they ‘didn’t recognise’ Dr Martin’s account, but added: ‘The Government listens to and takes evidence from stakeholders as part of the policy development process – that’s what people expect us to do.’
The Bank of England declined to comment.
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