Housebuilder Bellway has set aside more than £500m for building safety remediation, its preliminary financial results have revealed.
The company has set up a new division dedicated to building safety to oversee legacy remediation works, and allocated an extra £346.2m to its planned expenditure.
In a note posted with its accounts, the company said: “Since 2017 the group has set aside £513.7 million for legacy safety improvements in England, Scotland and Wales. This includes our commitments as part of the pledge, and the developers’ pact, to remediate buildings constructed by the group since 5 April 1992.
“Through our new building safety division, Bellway is continuing to work with resident management companies and freeholders of apartment blocks to develop remediation strategies in respect of life-critical fire safety defects identified on those buildings.”
The firm posted results for the year to 31 July 2022 which showed that building-safety costs had taken a large chunk out of its profits for the year. Its pre-tax profit stood at £340.2m, a drop from the £479m in 2021. Its revenue grew to £3.5bn from £3.1bn the year before.
Bellway also warned that the housing market had begun to show signs of a slowdown, saying output of homes was “expected to be more moderate, given the uncertain economic backdrop”.
It also expected cost inflation to become a fixture for operations in the medium term, saying it did not expect cost inflation to abate any time soon “given materials shortages, rising wage costs and elevated energy prices”.
Commenting on the results, Bellway chairman John Tutte said: “The long-term fundamentals of the housing market remain positive.
“Good quality, affordably priced housing is in short supply across many parts of the country and in recent years this has been exacerbated by bottlenecks in the planning system.”