Homebuilder Ballymore has agreed to pay £20m towards fixing fire safety issues across its housing developments in London in a move it said could remove all cladding-related costs for thousands of its leaseholders.
The Ireland-based developer told several residents’ associations last week — including the group representing leaseholders at New Providence Wharf in London, where a serious fire broke out earlier this month — that it would contribute £20m, up from £15m initially agreed with the government in February.
It marks the first time that Ballymore has publicly stated how much it plans to put towards resolving cladding issues and comes after it has faced heavy criticism that it had sought to pass too much of the cost on to leaseholders.
Many other developers still have not set out how much they plan to contribute alongside the government, which created a £5.1bn Buildings Safety Fund to help cover the cost of removing flammable cladding following the deadly Grenfell tower fire in 2017.
Simon Pratt, managing director for Ballymore Asset Management, said in an email to the residents’ associations that the additional £5m will be “used to fund shortfalls between the cost of works and what will be covered by the government funds”.
He added: “We will endeavour that all costs of remedial works for fire safety can be covered between the government’s fund and Ballymore’s fund. However, we will not be able to commit this until such time as the relevant approvals are in place for the Building Safety Fund. We await the scope of works for each building to fully understand the nature of the shortfalls across affected properties under our management. We hope to clarify this by September.”
The uncertainty over who will foot the bill for cladding removal has caused huge levels of stress and anxiety among leaseholders across the UK, who fear that they could be handed life-changing bills of tens of thousands of pounds on flats they purchased in good faith some years ago.
One Ballymore leaseholder said the announcement had reassured residents that they would not face financially ruinous costs. “There is a degree of comfort here that eventually we won’t have to pay very much,” he said. “A few months ago, people were not very confident.”
But other residents said they remained concerned that unexpected costs could eventually be passed on to them. Several told the Financial Times that they still planned to attend protests at Ballymore sales sites and outside parliament over the cladding issue in the coming months.
The head of one residents’ association said: “They have come back with a lump of money but they are conspicuously not saying they will meet all costs relating to the fire safety issue. We cannot afford to call off the protests unless we get an unequivocal commitment that Ballymore will do the right thing and stump up the money to cover any and all costs.”
A leaseholder at New Providence Wharf, where the cladding is similar to that of Grenfell, added: “I am not hugely impressed . . . I think residents will be satisfied when they have to contribute nothing.”
Ballymore said the decision to increase its commitment to funding cladding removal costs was unrelated to the fire at New Providence Wharf, which left two people in hospital, 40 more needing medical treatment and has forced hundreds of residents into hotel accommodation for several months.
The developer added in a statement to the FT: “As a privately owned business, this is a very substantial contribution by our owners. Relative to our size, we believe it is the largest cladding contribution for a ‘for-profit’ build-to-sell developer and compares very favourably with the listed housebuilders.”
Some of the UK’s largest housebuilders have set aside far larger sums in anticipation of extensive fire safety work to come. Barratt Homes, Persimmon, Taylor Wimpey and Bellway have between them earmarked more than £500m to cover work across their portfolios.