Housebuilder Redrow pledges £164m to safe remediation of high rise schemes
Housebuilder Redrow has committed to meeting government safety standards for high rise properties in a move that will require it making a provision of £164m.
In its interim results the group, based in Ewloe, near Chester, said it believed the housebuilding industry should play its part in resolving the issue of legacy fire safety in high rise buildings and that the financial burden should not be borne by leaseholders.
The move was in the wake of the Grenfell Tower fire tragedy in a London high rise block in June, 2017, which resulted in the deaths of 72 people.
In January this year, Michael Gove, Secretary of State for Levelling Up, Housing & Communities and Minister for Intergovernmental Relations, said he would approach developers to fund the remediation of life critical fire safety issues on buildings over 11m with which they had any involvement in the development, going back 30 years.
Individual companies, including Redrow, have now received from government a proposed voluntary pledge regarding the remediation of life critical fire safety issues on buildings. Redrow said it has signed up to this pledge.
It said, historically, the group has not been a major constructor of high rise apartments. The majority of its high rise schemes were built between 2000 and 2010 as a response to the Government’s Planning Policy Guidance 3 which encouraged high density living.
Due to the group’s limited expertise in the design and building of such schemes, it outsourced the design and construction of the vast majority of these developments to principal contractors. To date Redrow has provided for estimated remediation costs of the small number of such buildings it constructed itself.
But it said that, in signing up to the pledge, it will be remediating all the buildings in which it was involved, whether or not it constructed them, going back 30 years.
It said the group’s existing provision for fire safety in high rise buildings is £36m. Based on the latest information the group estimates an additional provision of £164m is required as a result of the pledge.
It said this will be treated as an exceptional item in the results for the 2022 financial year.
Remediation works are expected to take a number of years to complete, Redrow said.
And it said this pledge is in addition to the Residential Property Developer Tax of four per cent of pre-tax profit which came in to effect on April 1, 2022.