Housebuilder Barratt Calls for U.K. to Rethink Fire Safety Levy
(Bloomberg) --
Barratt Developments Plc has called on the U.K. government to rethink its plans for an expansion of a levy designed to fund fire safety repairs.
“We urge government to reconsider its new plans to expand the scope of the building safety levy in addition to the existing residential property developer tax,” the company said in an emailed trading update Thursday.
“In our view, this is unjust and disproportionate, further punishing U.K. housebuilders who were not responsible for most of the historical buildings or building safety issues being addressed and fails to effectively allocate the cost of remediation to those responsible.”
Barratt, together with most of the country's largest housebuilders, has signed up to the government's building safety pledge and agreed to fix historic safety issues on buildings in the wake of the Grenfell Tower fire that killed 72 people in 2017. The U.K.'s Department for Leveling Up, Housing and Communities said last month that amounted to a 2 billion pound ($2.5 billion) commitment.
At the same time it announced plans to extend the levy to tax all new residential buildings in England with an aim of raising a further 3 billion pounds. The funds will be used to fix issues with blocks where the developer could not be identified or forced by law to resolve problems.
Flaws in the regulation of which materials were safe to use in the external cladding of tower blocks meant hundreds of mid- and high-rise buildings were developed in the U.K. with highly combustible materials. That landed residents with huge bills for temporary fire safety measures and uncertainty over who should pay for long-term solutions, particularly where buildings had since been sold on by their developers.
Thousands more were trapped in unsellable homes as insurers and lenders refused to finance some apartment purchases without certification that they were safe, checks that proved costly and time-consuming to carry out.
More from Barratt's trading update for the year to date:
- Trading in line with expectations
- Average weekly reservation rate up from a year earlier
- Year end net cash forecast to be between 1 billion pounds and 1.1 billion pounds
©2022 Bloomberg L.P.
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