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Updated: two developers sign building safety contract after Gove’s warning
Two of 11 builders told they would face a “ban” on constructing new homes if they did not sign up to fix fire safety issues have signed the contract, with three others saying they intend to follow.
A spokesperson for Telford Homes told Inside Housing today: “Telford Homes can confirm we have signed the government’s binding pledge contract.”
A spokesperson for London Square said the firm was “pleased to have signed” yesterday, and criticised the government’s “handling of the matter”. It said the contract the firm had received was inappropriate because it did not have any cladding or fire safety issues in its buildings (see statement below).
It comes after Ballymore, Dandara and Galliard all said they were likely to sign, after being name-checked by housing secretary Michael Gove on Tuesday (see box below).
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Grenfell contractor company among 11 facing ‘ban’ on building for failure to sign remediation pledge
Rydon Homes, the development division of the company that refurbished Grenfell Tower, is so far the only developer to indicate that it will not sign up – insisting that it should be treated as an SME builder.
Lendlease, a huge global development business headquartered in Australia, said it is still “working through the detail of the contract” and will respond in early April.
Abbey Developments, Avant, Jones Homes and Inland Homes are yet to comment.
It follows Mr Gove threatening that the firms would be “out of the housebuilding business in England entirely unless and until they change their course”.
He said they would lose the power to gain planning permission or receive building control sign-off – meaning existing sites would be required to pause.
He added: “I am concerned that some companies do not appreciate the grave nature of the responsibility that they bear.
“I’ll be writing to major investors in these firms to explain the commercial implications of the directors’ current decisions. I’ll write to local authorities and building inspectors to explain these developers’ projects may not be started or signed off.”
He said the government would introduce its ‘Responsible Actors Scheme’ next week, to give them a final chance to sign up.
Mr Gove has been in negotiations with builders for months, trying persuade them to take responsibility for fixing “life safety defects” on homes they have built.
The 39 developers that have signed up so far will agree to pay for fixes or refund taxpayers for 1,100 blocks with issues. However, this is likely to be only around 15% of the buildings that are in need of remediation around England.
Developers’ statements
A spokesperson for London Square said: “We are pleased to have signed the remediation contract with the DLUHC [Department for Levelling Up, Housing and Communities]. Our lawyers had made it clear to the legal team for DLUHC that the standard agreement we had been sent was inappropriate and not relevant to London Square. We have never had any cladding or fire safety issues, yet remain totally committed to the pledge signed last year that leaseholders should not have to pay for any costs associated with fire safety remediation work and our agreement needed to reflect this.
“It is deeply disheartening that 30 minutes after the government announced the list of non-compliant developers, including London Square, who had not signed, their legal team conceded to London Square that the agreement needed to be modified – a point we had been making to them for some time. It is also very disappointing that the government's handling of the matter has discredited our excellent track record for building high-quality homes and we have had to defend our reputation as a result.”
A spokesperson for Telford Homes said: “Telford Homes can confirm we have signed the government’s binding pledge contract.”
A spokesperson for Dandara said: “Dandara was not invited into any of the original consultations between government, the Home Builders Federation and the UK’s 50 biggest housebuilding and development companies – this has delayed the process. As a responsible developer, we have signed the developers pledge letter. We have also proactively engaged with owners and management companies to investigate and undertake any remediation works that may be required in respect of fire safety issues. We expect to sign the developer remediation contract imminently.”
A spokesperson for Galliard Homes said: “Galliard Homes are committed to upholding the principle that leaseholders should not have to pay for remediation of life critical building fire safety defects.
“We are working through the procedural matters with the Department for Levelling Up, Housing and Communities with the intention of signing this contract.
“We have already been remediating our buildings in line with government guidance for some time. We remain in constant dialogue with DLUHC during this period.”
A spokesperson for Rydon Homes said: “Rydon Homes develops an average of 16 family homes per year, which confirms our belief that Rydon Homes falls into the category of a small SME house builder. We have made this point to DLUHC but have had no response.
“When DLUHC wishes to extend the contractual scheme to all SME developers, Rydon Homes Ltd will engage with that process, with a view to agreeing to enter into a fair and reasonable agreement with the government.”
Rydon Homes’ most recent published accounts, covering the 12 months to September 2021, show it turned over a total of £49.1m in the prior two years. Its accounts said it had sites with planning for 199 units in 2021 and 726 units in 2020.
Inside Housing has asked how these figures were consistent with its statement.
A spokesperson for Lendlease said: “We’ve been in dialogue with government and key stakeholders to ensure a whole of industry solution is adopted to support potential remediation works, and recently announced a £114m provision which largely relates to buildings Lendlease inherited through our purchase of Crosby Homes in 2005.
“As a responsible global developer and investor, we firmly believe companies should only be held accountable when they’ve acted irresponsibly, and we’ve been in frequent conversations with the UK government on these issues both through the Home Builders Federation and directly. We’re continuing to work through the detail of the contract in the context of our global business and expect our governance processes will allow us to confirm our position by early April. The Department for Levelling Up, Housing and Communities is aware of our timeframe.
“In the meantime, we remain dedicated to a pipeline of work in the UK that is set to deliver around 34,000 new skilled jobs and nearly 30,000 new homes.”
Inside Housing understands that Ballymore is working on the contract’s final details and will sign soon.
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