The UK’s building safety crisis triggered by the 2017 fire at Grenfell tower could rumble on for another 20 years unless the government and lenders agree on a fix, according to the boss of one of the country’s largest housebuilders.
“It is a complex subject and it will run for a good few years,” said Jason Honeyman, chief executive of FTSE 250 housebuilder Bellway. Without ministers finding a way to contain the crisis, “we will be talking about this in two decades,” he added.
Concerns over building safety, particularly on high rise blocks, were triggered by the Grenfell fire, in which 72 people died.
A subsequent inquiry, which is ongoing, has highlighted concerns with the materials used on high-rise blocks, the companies supplying and fitting them and the regulatory regime governing building safety. The inquiry has found that the cladding on Grenfell tower was the “primary cause” of the fire’s rapid spread.
Attempts to remedy the problem were initially focused only on high-rise blocks with the same type of external cladding as Grenfell tower.
But worries over safety have since spread to all corners of the new-build property market, accelerated by government advice last year that any multistorey, multi-occupancy residential buildings of any height should be assessed for fire risk.
That advice raised potential red flags against almost 1m flats across the UK, in effect trapping their occupants in properties they are unable to sell because lenders will not offer mortgages against the homes until they are signed off as safe.
A shortage of professionals to carry out scoping work and differing interpretations of fire safety have slowed efforts to resolve the impasse.
“The issue here is interpretation of regulation and guidance. You could appoint a fire engineer with their own view and then the lender would have a different view,” said Honeyman.
Ministers have since attempted to row back on their 2020 advice and insist that lenders and surveyors take “a more proportionate” approach to risk. But mortgage providers have been reluctant to do so without firmer guarantees from the government.
Like other listed developers, Bellway has earmarked millions of pounds to remedy any issues on its own blocks.
Bellway set aside £52m in the year to the end of July 2021. The latest commitment brings the company’s total outlay related to the crisis to £165m, but Honeyman said he could not say whether that would be the final bill. “I’m never quite sure it covers it,” he said.
Announcing its full-year results on Tuesday, Bellway said revenues had rebounded to £3.1bn in the year to July 31, just short of the record £3.2bn posted in 2019 and more than 40 per cent higher than the previous twelve months, during which builders were forced to down tools in the early weeks of the UK outbreak.
Pre-tax profit of £479m doubled from the £237m posted in the previous year, but was about 30 per cent below 2019’s levels, the company said.
