Rydon Homes blocked from Help to Buy scheme, government confirms

It means Rydon Homes can no longer market their properties to first-time buyers with the offer of government-backed loans.

The Help to Buy scheme was launched in 2013 under David Cameron’s government and allows first-time buyers with deposits as low as 5% to borrow up to 20% (40% in London) of the full purchase price of a home.

The huge profits many house builders have made in recent years have been attributed largely to the popularity of the scheme.

It is due to be withdrawn completely in April 2023, meaning Rydon Homes would only lose out for just over a year. Rydon Homes’ website offers Help to Buy on a number of its developments in Kent and the South East.

Mr Gove has now written to Homes England, the administrator of Help to Buy, to inform it that it would be against the public interest to allow Rydon to sell homes via the scheme, given its close links to a company under scrutiny in the Grenfell Tower Inquiry.

Rydon Homes focuses on private housing developments in the south-east of England and offers Help to Buy to customers. According to its accounts, Rydon Homes posted a pre-tax profit of £700,000 last year and £9.7m in 2019.

Another arm of the group, Rydon Construction, was sold to Real, a new company, in April.

The Grenfell inquiry has revealed that Rydon Maintenance and Kensington and Chelsea Tenant Management Organisation, the tower’s building manager, held an “offline” meeting in March 2014 where they agreed to strip cost out of the project by switching from a safer zinc cladding to aluminium composite material (ACM).

The inquiry also heard that Rydon understated the savings which could be made from this switch and looked to “pocket the difference” in order to boost its profit margin.

Evidence showed the firm referring to tenants who complained about the works as “rebel residents”. Those who did not want work done have accused Rydon Maintenance of bullying, which it has denied.

Rydon declined to comment. It previously said it would continue to assist with the inquiry and that it seemed clear from the Hackitt Review and other evidence before the inquiry that a wider review of building regulations, product testing and certification is needed.

Mr Gove said: “It is in the public interest to exclude Rydon Homes from the Help to Buy scheme with immediate effect given the extremely concerning evidence heard by the Grenfell Tower Inquiry about its sister company.   

“The development and construction industry should be in no doubt: I will continue to go after those who put lives at risk, are responsible for the building safety crisis and are failing to play their part in fixing it. The Grenfell community and innocent leaseholders deserve better.”    

The announcement is another indication of the government’s more aggressive approach to place much of the blame for the building safety crisis on the construction industry and manufacturers.

Earlier this month, Inside Housing revealed that Mr Gove was weighing up contract bans and barring firms it believed were responsible for the building safety crisis.

Mr Gove also previously indicated that while he believes government has some accountability for the building safety crisis the country finds itself in, private developers, contractors and manufacturers are the most culpable.

During a select committee hearing last month, he told MPs: “You can say the sheriff, or sheriffs, might not have been on the ball, but the cowboys were behaving like cowboys in an unregulated way.”

Grenfell United welcomed the decision. “We have called on government to remove Rydon from all public sector frameworks since 2019.

“We wrote a letter to [housing minister at the time] Robert Jenrick in 2020, shortly after the mayor of London Sadiq Khan banned Rydon from all contracts in November 2019.

“We will continue to ensure that all companies exposed in the public inquiry for their role in the Grenfell fire are removed from government frameworks,” the campaign group said in a statement today.