Bellway shares were down 0.4% to 2,542p in early morning trading on Thursday following the company’s announcement that it would shoulder the £486.8 million fire remediation cost for its portfolio of buildings.
The housing firm made the commitment after it accepted the Government’s request for housing companies to take on the cost of fixing faulty cladding and fire risks according to the new Publicly Available Specification (PAS) from the British Standards Institute.
Bellway reportedly withdrew from the Government’s £4 billion housing fund, which had initially been drawn up to fund housing company expenses to fix fire hazards in their properties.
The company joined a series of housebuilders who recently signed up to the Building Safety Pledge, which committed the groups to using private funds to address fire remediation concerns in their properties.
The changes are set to be carried out on all buildings over 11 metres in height that Bellway helped to construct over the last 30 years.
The company said that it has currently altered four buildings, with plans in motion to carry out work on an additional 13 properties and designs in place for a further three developments.
Bellway confirmed that the alterations would not impact its future dividend payments and come at no cost to residents living in its properties.
The property firm said its balance sheet remained well capitalised, with a net cash of £195.8 million, a net asset value of £3.4 billion and committed debt facilities at £530 million.
The company noted that its current assets left it plenty of breathing room to cover its expenses under the fire remediation pledge and reiterated that the cost would not be detrimental to its future growth.
“The issue of life-critical fire safety defects in apartment schemes is a sector-wide challenge and Bellway has engaged extensively and constructively with DLUHC over recent months, both directly and through the Home Builders Federation (‘HBF’),” said Bellway CEO Jason Honeyman.
“We have always taken the issue of building safety very seriously and agree with the Government’s principle that residents should not have to fund life-critical fire safety remedial works.”
“Our engagement to date and commitment to continue our responsible approach has resulted in Bellway today making a pledge that schemes constructed by us or on our behalf in the last 30 years will be remediated.”