British builders: drawing a line under the façade crisis?

Britain has had no fewer than four foreign secretaries for housing since June 2017, when a wildfire fueled by combustible cladding ripped through Grenfell Tower in west London, Emma Haslett said in the New statesman. In February, the last incumbent, Michael Gove, is effective gave the builders an ultimatum: “Pay for your disguise mistakes or face my wrath”.

The threat appears to have been uniquely successful, Nils Pratley said in The guard. “Fifty-three developers were asked to sign a building security pledge to fund the refurbishment of defective facades across the country, otherwise they would be disqualified from building permits. As of last week’s deadline, all the major players were on board.

That doesn’t mean they’re happy, Ben Gartside said The Sunday Telegraph. Indeed, Gove is accused of bringing a “wrecking ball” to the bottom line. As one analyst notes, Bellway and Redrow have “signed provisions equal to half of annual pre-tax earnings” despite already facing high capital costs and “high exposure” to a potential housing market downturn. No wonder they are interfering to avoid being hit by the ‘next round of negotiations’ to increase the pot to £4bn.

Public sympathy may be limited, Lex said in the FT. Persimmon’s £75million bill, for example, is the same amount she paid former boss Jeff Fairburn as a severance bonus. Still, there has to come a point when the remaining costs are “more spread out,” Nils Pratley told the Guardian. The balance sheet for ‘orphan’ buildings (mid-rise blocks built by foreign or defunct firms) or where ‘local authorities may have fitted faulty cladding after construction’ could be as high as £3bn. UK developers might reasonably ask “how much Gove is trying to track down and hunt down those responsible”. British builders: drawing a line under the façade crisis?

Fry Electronics Team

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