U.K. Homebuilders Should Pay More of Safety Costs, Lawmakers Say
U.K. Homebuilders Should Pay More of Safety Costs, Lawmakers Say
(Bloomberg) -- U.K. lawmakers are calling for homebuilders to ramp up their share of compensation for developments of potentially dangerous apartments instead of making owners foot the bill.
A group of members of Parliament from both main political parties rejected proposals to force remedial costs on owners, some of whom have been brought close to bankruptcy by the repairs. In a report released Thursday, they urged the government and industry players to expand an existing fund and cover all relevant costs.
While the government is under no obligation to agree to any of the proposals, the report adds to pressure on ministers to do more in the wake of revelations about works performed on Grenfell Tower which caught fire in 2017, killing 72 people. Thousands of leaseholders around the U.K. have since discovered that their buildings also have safety concerns which could put them at risk.
The report said current funding for repairs doesn’t come close to meeting the real bill, which could be as much as 15 billion pounds ($21 billion). The government has committed about a third of that so far, and introduced a levy on developers. Some builders have also set aside money for repairs on buildings they developed but no longer own, with Persimmon Plc committing 75 million pounds and Taylor Wimpey Plc providing for 125 million pounds.
“We heard that compared to their pretax profits, it is reasonable to ask developers to contribute more,” members of Parliament said in the report. “We also heard of shoddy workmanship, corruption, falsified data, and gaming product-testing by some in the industry.”
One in six leaseholders affected by the building safety crisis are exploring bankruptcy, according to a survey by industry publication Inside Housing.
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