House builder Taylor Wimpey sets up £125m fund to fix sub-standard cladding on flat blocks

Taylor Wimpey, one of Britain's biggest house builders, has announced a £125m fund to fix cladding on flats to meet safety standards.

The FTSE 100 group said the provision would cover costs of work on 232 apartment buildings constructed over the last 20 years.

It is the latest house building company to set aside fresh funds to set aside money for cladding issues in the wake of the Grenfell fire in 2017 that left 72 people dead.

Taylor Wimpey chief executive Pete Redfern said: "We have taken this decision in order to provide certainty for customers and leaseholders and to avoid them bearing the cost of investment to ensure their buildings are safe."

Last month, rival Persimmon announced a £75m provision to help fix buildings.

The government said it would provide a further £3.5bn to remove unsafe cladding from residential buildings but faced criticism as the fund only covers buildings of 18m and higher.

Many leaseholders have been left unable to sell or mortgage their homes because of safety fears in the wake of the Grenfell tragedy.

Taylor Wimpey said its fund would include apartment buildings below 18m.

It said it would pay for and oversee improvement works of flat blocks it owns, regardless of whether they are eligible for the government fund "to make them safe and mortgageable" by meeting the latest regulatory standards.

If Taylor Wimpey no longer owns the building and it is not eligible for the government cash, it will contribute to "fair and proportionate" improvement work, it said.

The provision adds to £40m previously set aside by Taylor Wimpey to pay for the removal of ACM cladding, the type which was used at Grenfell, on high rise flat blocks - though the company said they met regulations at the time they were put up.

Taylor Wimpey said that since then there had been a number of updates to regulations.

"Many leaseholders have been left with unreasonably large bills to ensure their properties are safe and in line with post-Grenfell safety standards," the company said.

The announcement came as Taylor Wimpey announced a 68% fall in profits to £264.4m for 2020 as the coronavirus crisis saw sites shut down during the spring and sale completions slump.

But the housing market has bounced back, helped by a stamp duty holiday, and the group said it now had a record UK forward order book.

Builders such as Taylor Wimpey stand to benefit from this week's Budget if the chancellor extends that holiday.

The Treasury has already revealed plans to guarantee 95% loan-to-value mortgages for first-time buyers, lifting shares in the sector on Monday.

Taylor Wimpey said that with the sunnier outlook for the housing market it would reinstate its annual dividend, cancelled last year, with a £151m payout.