Homebuilder Persimmon sets aside 75 million pounds to fix cladding issues

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(Reuters) – British homebuilder Persimmon (LON:) earmarked 75 million pounds ($103.6 million) for removing or replacing cladding material in some of its buildings on fire safety concerns as the industry responds to a deadly blaze in a London tower block four years ago.

Persimmon stopped short of laying out the exact steps it will take on buildings it no longer owns, saying it “will act to remove uncertainty and anxiety for residents” if the owner does not step up.

“Where we still own the building we will act. Where we no longer own them we will work with the owners to make sure they meet their legal responsibilities and duty.”

The move comes ahead of an update by housing minister Robert Jenrick in parliament set for Wednesday, with the Guardian reporting https://www.theguardian.com/society/2021/feb/09/ministers-to-increase-financial-support-for-cladding-removal newspaper that ministers are set to announce billions of pounds in extra support to address the cladding crisis.

Persimmon shares were down 1% at 27.6 pounds in early trade, lagging the wider market.

A string of regulations have been implemented over the last two years after a fire engulfed Grenfell Tower, a 24-story London housing block in 2017, the deadliest domestic fire in Britain since World War Two.

Persimmon, which accounts for less than 1% of all high-rise developments in the UK, added that it identified 26 buildings where cladding may need to be removed, as per new government guidance.

The company also said that in the past it built multi-storey buildings which met all the fire safety rules and regulations in place at the time, but used cladding materials which may now be considered unsafe and require removal.

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Last week, Britain’s largest homebuilder Barrat Developments said it would keep aside 15.6 million pounds for similar cladding=related issues.

In late 2019, an independent review identified that Persimmon needed to improve the quality and build of its homes and comply with guidelines, rather than just focus on inspections immediately before and after the sale of a home.

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