Following news that Bellway has signed up to the voluntary pledge with the Department for Levelling Up, Housing and Communities in relation to historical fire safety issues on buildings, Oli Creasey, property research analyst at Quilter Cheviot, commented: “A number of UK housebuilders have signed up to the Government’s Building Safety Programme. With high-rise buildings (those over 18m tall) already covered by a new tax on developer profit, the Programme aims to encourage builders to go back and pay for mediation work on properties between 11-18m tall which they had built. 

“While there was initial pushback from the building sector, we have seen most companies now agree to cover these costs, likely putting further pressure on the remainder of the sector, which faces the risk of severe planning restrictions if they don’t comply. 

“The impact on companies is not symmetrical. The larger builders, whose focus has been on building houses rather than apartment blocks for some time now, face limited consequences; Taylor Wimpey’s £80m additional provision is equal to <10% of last year’s EBIT. However, Redrow and Bellway have made more significant new provisions – equal to c. 50-60% of last year’s EBIT, and Crest Nicholson’s £80-120m provision will likely account for almost all of last year’s profit.”