Bellway earmarks just £20m to fix dangerous cladding as it reports record £1.7bn revenue

Housebuilder on course to sell 10,000 homes next year - more than ever before

Ben Chapman
Thursday 25 March 2021 07:06 GMT

Housebuilder Bellway has set aside £20.3m to deal with fire safety defects in its buildinga as it reported a record £1.7bn in sales.

The company, which has been criticised for substandard construction work on some of its developments, is on course to sell around 10,000 homes this year.

It resumed dividends to shareholders with a 35p-per-share interim payment and forecast its best ever year thanks to strong underlying demand.

The group reported a 4 per cent fall in pre-tax profits to £280.2m for the six months to 31 January, though earnings edged 0.2 per cent higher at £297.7m.

Bellway said the money set aside to fix dangerous buildings is a "substantial sum which demonstrates Bellway's responsible approach to supporting customers with regards to this issue".

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The £20.3m announced on Wednesday takes the total that Bellway has earmarked for remediation costs to o £131.6m.

Campaigners have argued that developers should pay much more towards a bill for fixing dangerous buildings and a recent series of bumper financial results has indicated that they could afford to do so.

Bellway said: "The legal responsibility for ensuring fire safety in buildings usually rests with the current owners or their managing agents, which in most cases for our legacy portfolio is not Bellway.

"As a responsible developer however, Bellway takes apartment safety concerns seriously and has therefore established a fire remediation team to work with building owners to help resolve historical issues."

Bellway said £91m of its fund for remediation remains unspent, partly because the company is struggling to find enough people with the skills required to carry out the work.

It said: “Obtaining a supply of suitable replacement materials, and appropriately skilled remediation experts, proves to be an enduring challenge. 

“As a result, while a prudent approach has been taken, there continues to be inevitable labour constraints and upward pressure on costs as we work with third parties to establish fully costed remediation solutions on the 24 developments.

Under plans unveiled last month developers will have to pay a levy on future high-rise blocks of flats. The government estimates the measure will bring in around £2bn over a decade.

Owners who bought flats now found to be covered in combustible materials and plagued by a host of other safety problems have been handed bills of tens of thousands of pounds.

Nationally, leaseholders are being told they must cover the majority of a total bill that is conservatively forecast to reach £15bn.

MPs were this week accused of "abandoning" hundreds of thousands of leaseholders after voting down an amendment that would have ensured they don't foot the bill.

Bellway's forward order book stood at 6,028 homes worth £1.6bn on 14 March, up 8.4 per cent on a year earlier.

Housebuilders are also set to benefit from billions of pounds of effective government subsidy for the property market announced in this month's Budget.

The extension of the stamp duty holiday and the reintroduction of a mortgage guarantee scheme for buyers with only a 5 per cent deposit are both expected to push up property prices.

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