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Bellway is experiencing an “enduring challenge” finding suitable replacement materials and appropriately skilled contractors to ensure that cladding on developments it has previously built meet the current interpretation of Building Regulations.
The news came as Bellway issued its interim results for the half year to 31 January 2021.
Bellway has established a fire remediation team to work with building owners to resolve historical issues and said that since 2017, it has set aside £131.6m in relation to fire safety. But £91.6m of that provision, relating to 24 developments most of which are over 18m in height, has remained unspent as of 31 January.
Chief executive Jason Honeyman said: “Initially, our review efforts were directed towards those buildings over 18 metres in height, where aluminium composite material had been used in the construction of the external wall envelope. The scope of our review has since widened, following the ‘Advice for Building Owners of Multi-storey, Multi-occupied Residential Buildings’, issued by the Ministry of Housing, Communities and Local Government in January 2020.
“We therefore now approach this issue, with the benefit of sector-wide hindsight and, by applying revised guidance which clarifies the government’s interpretation of the extant building regulations that were in place at the time of construction. Our reviews, which often include the results of investigative surveys, consider whole external wall systems to determine whether the combination of materials used adequately prevent external fire spread, thereby rendering the building safe.
“Differing regulatory frameworks result in ongoing changes with regards to the scope of potential remediation works. In addition, obtaining a supply of suitable replacement materials, and appropriately skilled remediation experts, proves to be an enduring challenge. As a result, while a prudent approach has been taken, there continues to be inevitable labour constraints and upward pressure on costs as we work with third parties to establish fully costed remediation solutions on the 24 developments. We believe we have captured the vast majority of issues and all known liabilities are properly provided for.”
Over the half year, Bellway increased revenue by 11.6% to £1.7bn, while pre-tax profit was down 4% to £280.2m. The firm recorded a 6.3% increase in the number of homes it sold over the period, to 5,656 homes. It now expects to complete the sale of around 10,000 homes this year, compared to 7,522 by 31 July 2020.
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