Persimmon Offers to Fix Risky Homes as Cladding Crisis Grows

Persimmon Plc, the U.K.’s biggest homebuilder, has offered to pay for work on potentially unsafe buildings in the wake of the cladding scandal that arose from London’s Grenfell Tower fire.

The firm has made a provision of 75 million pounds ($104 million) in its 2020 results for any necessary repair work on 26 buildings it developed that may be affected by the issue, it said in a statement Wednesday. It no longer owns the properties and said it would provide support where owners failed to accept their legal responsibilities.

“The concern around now banned cladding is affecting many thousands of homeowners who live in high-rise buildings right across the country,” Chairman Roger Devlin said in the statement. “We believe we have a clear duty to act to address this issue.”

Pressure has been growing on the U.K.’s biggest homebuilders to pay their share for a safety scandal that has been brewing since 72 people lost their lives in 2017 when the Grenfell Tower in West London caught fire due to cladding issues. Persimmon said it accounts for less than 1% of all high-rise developments, which have been most affected by the crisis.

“However, in the past we have built multi-storey buildings which met all the fire safety rules and regulations in place at the time, but which used cladding materials which may now be considered unsafe and require removal,” the statement said.

Blame Game

Both of the U.K.’s major political parties are calling for the private sector to take more financial responsibility for fixing hundreds of potentially dangerous buildings to prevent another tragedy. The price for the repairs could be as high as 15 billion pounds, according to a Parliamentary report.

So far, a large chunk of the financial burden has been placed on leaseholders, some of whom are already paying for an array of safety measures, including 24-hour security and installing fire alarm systems. Suggestions on how to switch costs to homebuilders range from a tax on developer profits to a levy for constructing high rise apartment blocks.

“In many cases, building owners or their managing agencies have passed on significant remediation costs to leaseholders without regard to the affordability of those measures,” Minister of State for Housing Christopher Pincher told lawmakers in Parliament last week. “We absolutely expect developers, investors and buildings owners who have the means to pay to do the right thing.”

©2021 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.