(Alliance News) - Housebuilders and developers have six weeks to agree to a GBP2 billion remediation package for unsafe buildings or face "significant consequences", the UK government said on Monday.
Together with an earlier Building Safety Levy, it means developers will pay about GBP5 billion, as the UK government moves to shore up building safety in the wake of the Grenfell fire in London back in 2017.
Among London-listed housebuilders, Persimmon PLC was down 0.9% in morning trade. Barratt Developments PLC was 1.2% lower and Berkeley Group Holdings PLC was down 0.9%.
"The government has set a six-week deadline for developers to sign the legal agreements and is warning that companies who fail to sign and comply with the terms of the contract will face significant consequences. Legislation will be brought forward in the spring giving the secretary of state powers to prevent developers from operating freely in the housing market if they fail to sign and comply with the remediation contract," the UK Department for Levelling Up, Housing & Communities said.
The department is led by Michael Gove.
Gove added: "Today marks another significant step towards righting the wrongs of the past and protecting innocent leaseholders, who are trapped in their homes and facing unfair and crippling costs. Too many developers, along with product manufacturers and freeholders, have profited from these unsafe buildings and have a moral duty to do the right thing and pay for their repair. In signing this contract, developers will be taking a big step towards restoring confidence in the sector and providing much needed certainty to all concerned.
"There will be nowhere to hide for those who fail to step up to their responsibilities - I will not hesitate to act and they will face significant consequences."
Gove said "faulty and ambiguous" was partly to blame for the Grenfell Tower disaster, PA reported on Sunday.
Evidence to the inquiry showed official guidance was widely seen to allow highly flammable cladding on tall building, prompting The Sunday Times to ask Michael Gove if he accepted the rules were wrong.
"Yes," he replied.
By Eric Cunha, Alliance News news editor
Comments and questions to newsroom@alliancenews.com
Copyright 2023 Alliance News Ltd. All Rights Reserved.
Persimmon (PSN)
Barratt Developments (BDEV)
Berkeley Group (BKG)