Bellway has set aside nearly £6m to cover the costs of replacing dangerous cladding across its developments.
The housebuilder revealed in its full-year accounts that it had made a provision of £5.9m to pay for remedial work on a “small number of developments” found to have dangerous ACM cladding.
Bellway becomes only the fifth developer to publicly commit to funding the replacement of ACM cladding, joining Barratt, Legal & General, Mace and Taylor Wimpey.
The company’s chief executive Jason Honeyman said: “Whilst we received Building Regulations approval for their use at the time, as a responsible developer, we are fully engaged with the government and our partners to develop solutions that protect our customers and future occupiers.”
He added that the company had strengthened its processes and training in relation to fire safety issues, and vowed to develop these further as government guidance in the area became clearer.
Construction News reported this week that Bellway had written to residents at its 500-home New Festival Quarter development (pictured) vowing to protect them from replacement cladding costs.
The housebuilder said it would work with Peabody – its development partner on the site – to ensure cladding was replaced and that the costs, estimated at up to £2m, would not fall on residents.
The Festival Quarter development is one of a handful of Bellway schemes found to have cladding that needs to be removed.
Other developments include two sites in Cardiff Bay Prospect Place and Quayside, as well as the Palm and Malt House development in Lambeth.
The decision by Bellway comes just a month after housing secretary James Brokenshire warned developers they could face fines or bans from future public contracts if they did not remove dangerous cladding and protect residents from the costs.
Mr Brokenshire welcomed Bellway’s decision and said it was building owners’ and developers’ moral imperative to replace unsafe cladding and protect leaseholders from the cost.
He added: ”“Bellway joins a growing list of developers who are doing the right thing.”
In a letter to residents, seen by CN, Bellway said: “The development partners, Bellway and Peabody, will be working with the freeholder, Adriatic Land 6 (GR1) Limited and NHBC (provider of the 10-year warranty on your homes) to ensure that no costs associated with the cladding replacement or safety temporary measures will be passed on to residents.”
Bellway has now appointed and paid for designers to start work on the replacement cladding, and will shortly tender for contractors to carry out the work – slated to commence next summer.
Bellway posted a pre-tax profit of £641.1m in its full-year accounts for the year to 31 July 2018, up from £560.7m for the previous 12 months.
Turnover at the firm also rose to £2.96bn for the period, up from £2.56bn on the previous year.
The housebuilder constructed 10,307 homes in the year, the first time the company had broken the 10,000-unit mark.
Despite the growth, Bellway warned that the UK’s exit from the EU could “significantly impact its ability to deliver its strategic objectives”.
The company said Brexit could hit consumer confidence, but added that it would be able to increase its output in the coming year if market conditions remained robust.