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Barratt pays £56m to fix construction issues on legacy projects
The UK’s biggest house builder has been hit with a £56m bill to fix fire safety and structural problems in buildings it previously constructed, its accounts reveal.
In it’s latest half-year results, Barratt said it incurred an additional £56.3m of costs in relation to “legacy properties” in the six months to December 2020, compared with £17.8m in the same period in 2019.
The largest component of the costs was related to Citiscape, a block in Croydon that was built by Barratt in 2002 and had the same aluminium composite material cladding as that used on Grenfell Tower.
In September 2019, residents were evacuated from the building after “unrelated structural issues” were discovered while work to replace the cladding was underway.
Barratt took the decision to pay for remedial work on the reinforced concrete frame at Citiscape in July last year.
It also undertook a review of 26 other similar developments. In its results, Barratt said the review is “substantially complete” and that it has not identified any other buildings with issues as severe as those at the south London block.
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The house builder added it is committed to ensuring costs associated with remediation work are not borne by Citiscape leaseholders and that it has covered the cost of some work at “a small number of developments” where it had a legal liability to do so.
The Building Safety Bill came during a period where Barratt recorded a 9% jump in completions, which the organisation attributed in part to spillover from the first six months of 2020, when the coronavirus pandemic forced it to temporarily shut its sites.
Pre-tax profit for the six months up to December 2020 was £430m, up from £423m in the same period in 2019.
Commenting on the results, David Thomas, group chief executive of Barratt Developments, said: “Our first priority remains keeping our colleagues and customers safe.
“Our customers are at the heart of everything we do and I would like to say a huge thank you to all of our employees and sub-contractors who have continued to deliver great-quality homes and excellent customer service throughout these challenging times.
“We have achieved a fantastic first-half performance, with a strong rebound in completion volumes and good progress towards our medium-term targets.
“We have also made a solid start to the second half and are now over 95% forward sold for our financial year.
“While we are mindful of the continued economic uncertainties, the housing market fundamentals remain attractive and our outlook for the full year remains in line with expectations.
“We will continue to lead the industry in quality and service as we deliver the high-quality sustainable homes and developments the country needs, creating jobs and supporting the economic recovery across England, Scotland and Wales.”
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