Latest news with #cladding
Times
02-08-2025
- Business
- Times
Angela Rayner, the housing tycoon and his £100m cladding bailout
Housing secretary Angela Rayner is poised to throw a lifeline to controversial housebuilding tycoon Jeff Fairburn as his troubled company's bill to fix Grenfell Tower-style cladding balloons beyond £100 million. Fairburn, famed for pocketing £75 million in 2018 while running Persimmon Homes when it was profiting from the taxpayer-funded Help-to-Buy programme, now chairs Avant Homes. The debt-laden and lossmaking business, one of Britain's biggest housebuilders, has seen its costs for replacing potentially lethal cladding soar. Much of the money spent came from loans from the taxpayer to the housebuilding industry which were meant to be repaid rapidly, but it has emerged today that Rayner's department is close to permitting Avant to postpone repayments. Avant's cladding bill has jumped from £68.4 million last year to £106.9 million, accounts revealed last week. That came on top of spiralling losses and debts at the company, backed by Wall Street hedge fund Elliott Management. The cost of remediation was initially footed by taxpayers through the Building Safety Fund (BSF), which then recouped the money from the developer responsible for building the property. More recently, housebuilders have committed to assessing potentially dangerous properties and then paying for remedial works. Avant's £106.9 million is a mix of money owed to taxpayers through the BSF and an estimate of the cost to ensure the remaining buildings are safe. Bosses at Avant have been in talks with officials from Rayner's housing department for more than a year to agree to delay the reimbursement of taxpayers for funds due to the BSF. Payments will be 'deferred and spread over a number of years' under a deal that is 'now reaching a conclusion', Avant said. However, fears that the company could run out of cash persist. The company's 'liquidity risk' rose in the year to June 2024, the balance sheet date for the accounts. Avant has £250 million of borrowing from a group of lenders led by HSBC. It was due to repay the group on July 24, but is understood to have been granted a short-term extension while it negotiates a refinancing of its bank loan. The company is in advanced talks to extend its bank loan to the end of October 2026 — although only £180 million of the debt would be refinanced, reducing to £150 million by the end of March next year. Avant Homes Group Limited generated an £83 million pre-tax loss in the 12 months to June 30, 2024, the accounts disclose. The previous year the company turned a £1.5 million pre-tax profit. Avant's auditor KPMG flagged a 'material uncertainty' over Avant's ability to continue trading for the foreseeable future. KPMG said that Avant's ability to finalise a refinancing and a forbearance deal with the housing department as well as reducing spending on new plots of land would determine whether the company could stay afloat. A spokeswoman for Avant said: 'The group is overseeing the remediation of buildings constructed since 1992. All of the buildings which are potentially in scope were developed whilst the group was under previous ownership and management. 'Avant is making every effort to remediate the building defects created by others in response to the building safety obligations, but the scale and complexity of these obligations have required extensive technical and legal evaluations. 'We have sought to work with MHCLG [the Ministry of Housing, Communities and Local Government], lenders, and independent experts to ensure the remediation, which is a priority for management, is delivered responsibly, sustainably and in as an accelerated timescale as possible.' Fairburn established Avant as one of the UK's biggest regional housebuilders, with significant developments across Yorkshire, northeast England, the Midlands and Scotland. Elliott is the majority owner of the business with Fairburn also owning a major stake. Shareholder loans, which attract 12 per cent interest that is added to the total borrowing, rose from £356 million to £422 million. The government said: 'Viva Midco, parent company of Avant Homes, are one of 54 developers who signed a Developer Remediation Contract with government and we expect all signatories to comply with their contractual commitments. 'We are taking decisive, tough action and going further than ever before to speed up the unacceptably slow pace of remediation, drive accountability across the sector, and provide an end in sight for residents who have suffered for too long.'
The Independent
30-07-2025
- Business
- The Independent
Taylor Wimpey slumps to loss on £222m fire safety hit
Taylor Wimpey has plunged to a half-year loss after taking another £222 million cost hit for removing cladding from high-rise buildings following the Grenfell Tower fire tragedy. The housebuilder reported pre-tax losses of £92.1 million for the six months to June 29 against profits of £99.7 million a year earlier. It said this was largely due to an extra £222.2 million provision for fire safety measures. The company also said full-year earnings would be lower than expected at £424 million after taking an unexpected £20 million charge for historical defective work by a former contractor. Experts at AJ Bell said the latest cladding cost has seen Taylor Wimpey's total bill swell to more than £550 million in the wake of the Grenfell fire in 2017, which killed 72 people. They estimated the cost to FTSE 100 and FTSE 250 housebuilders had now reached more than £3.5 billion. Large housebuilders agreed in 2022 to pay to fix cladding issues on their properties following public and political pressure. Taylor Wimpey's shares fell 5% on Thursday after its interim results laid bare the impact of the costs. Jennie Daly, chief executive of Taylor, said: 'The safety of our customers remains our highest priority – this principle has consistently guided our approach, and we have increased our cladding fire safety provision to reflect findings from updated fire risk assessments and investigations in the first half.' The group said it was also pushed to a loss by an £18 million payout after an investigation into information sharing in the sector by the UK competition watchdog. Taylor was one of seven builders that recently agreed to pay a record £100 million between them as part of a package of commitments to address concerns following the probe by the Competition and Markets Authority into whether they shared commercially sensitive information. In its latest results, Taylor said it saw 'softer' market conditions in the second quarter as affordability continues to hamper demand, particularly from first-time buyers. 'While affordability remains constrained, particularly amongst first-time buyers, lenders remain committed to the UK mortgage market and long-term fundamentals are positive, with significant unmet need for UK housing,' Ms Daly said.
Times
30-07-2025
- Business
- Times
Taylor Wimpey swings to loss as cladding bill doubles
Taylor Wimpey is facing a new multi-million pound bill to fix fire safety issues at some of its older blocks of flats. The developer, one of the biggest in Britain, expects its remediation works to cost £222.2 million more than it had originally expected, almost doubling its cladding bill, which stands at £555 million. Even that is just a 'best estimate'. Bosses had hoped to have all the remediation works completed by 2028, but now accept that the repair programme will continue until 2030. Most of the extra costs that the FTSE 100 group is facing relate to defects with cavity barriers hidden behind walls and ceilings which prevent the spread of fire and smoke. These issues 'were not visible in earlier non-intrusive assessments' and so have only been picked up in recent months after the brickwork and render was removed. 'When we did our first assessments, the priority was around cladding that was combustible, and of course brick and block and render isn't combustible,' Jennie Daly, the chief executive, said. 'Now we're going into those buildings doing intrusive [inspections], we're finding these [additional] defects.' Taylor Wimpey said that the fire engineers who sign off on buildings were 'becoming more cautious'. At a number of buildings that inspectors had previously said were fine, they have now decided that they do require some remediation work after all. 'There's a lot more risk aversion,' Daly, 55, added. • Is now a good time to take home some Taylor Wimpey shares? As a consequence of the extra costs, Taylor Wimpey swung to a pre-tax loss of £92.1 million in the six months to the end of June, having turned a profit of £99.7 million in the same period of 2024. The interim dividend, to be paid on November 14, was reduced by 3 per cent to 4.67 per share. Even after excluding the new cladding costs, underlying pre-tax profits fell by a fifth to £148.1 million from £187.7 million in the first half of 2024. Taylor Wimpey's profitability was hampered by having to pay £20 million to fix 'defective workmanship' at one of its old London developments. The contractor responsible had originally agreed to carry out the repair works but has run into 'financial difficulties', leaving Taylor Wimpey to foot the bill. That means this year's annual profit is expected to come in at £424 million — 5 per cent below what management had been aiming for. Given the increased cladding costs and reduced profit expectation for 2025, Taylor Wimpey shares fell as much as 7 per cent on Wednesday morning. At midday, they were 5¼p, or 5 per cent, down at 101¾p. Created through the merger of Taylor Woodrow and George Wimpey in 2007,Taylor Wimpey is one of the biggest housebuilders in Britain and is listed on the FTSE 100 with a stock market value of close to £4 billion. Between January and June it built 5,264 homes — 11 per cent more than the 4,728 homes it delivered in the first half of 2024, reflecting improved demand from would-be homebuyers in the opening few months of the year. However, trading over the all-important spring selling season was 'softer' and that has persisted over summer. Reflecting that, Taylor Wimpey is selling fewer homes each week than it was this time last year, although it still expects to deliver between 10,400 and 10,800 homes across 2025 as a whole. 'The first quarter was a really good quarter, but there was definitely a sentiment shift in the second quarter,' Daly said. 'Customers are just being a lot more cautious. Whether that's a concern about tax [rises] in the autumn or feeling that their jobs are maybe a little bit less certain than they were; tariffs and other issues or even waiting for another rate cut. There's a variety of things, but it's all coming together to give the sense of hesitancy and caution.' Pricing is 'broadly flat', Taylor Wimpey said. Its average selling price of £313,000 is 1.3 per cent below last summer, but that is mostly down to the size and location of the houses it has sold so far this year, rather than underlying price deflation. There remains a north-south divide in terms of pricing, with Taylor Wimpey able to push prices slightly harder in the north, where houses are generally cheaper. By contrast, affordability remains a problem in the south of England. 'I have a real concern for first-time buyers, particularly in the south,' Daly said. 'Mortgages [for first-time buyers] are available but they're more expensive so that tests affordability, then you've got to build your deposit and now you've got [extra] stamp duty costs. There's quite a lot going on for first-time buyers, who are fundamental to the health of the housing market.'
BBC News
30-07-2025
- Business
- BBC News
Costs to fix cladding wipe out Taylor Wimpey's profit
Higher than expected costs to remove cladding from Taylor Wimpey's buildings in response to the Grenfell fire tragedy have wiped out its profits, the housebuilder has company made a loss in the first half of this year after putting aside an extra £222m to fix fire safety defects in homes it has Wimpey's share price sank early on Wednesday as it also revealed a slow down in sales, with first-time buyers struggling to get on the housing ladder. The Labour government has made boosting housebuilding a priority, though analysts say private firms are less likely to build due to higher interest rates. Jennie Daly, Taylor Wimpey chief executive, said that affordability remained "constrained, particularly amongst first-time buyers", but that banks and building societies were still "committed" to lending for mortgages because of firm said its UK sales rate for July had fallen compared to the same period last year, while the average sales price for its UK homes had dropped to £313,000 from £317, buyers have struggled to get a foot on the housing ladder since interest rates began rising in 2022, with the average borrowing term for first-time buyers rising to 31 years as they try to keep monthly repayments as low as well as a drop in sale prices, Taylor Wimpey also recorded £92m pre-tax loss for the first six months of the year largely due to "exceptional charges" from cladding 2022, large housebuilders agreed to pay to fix cladding problems on homes they had built following pressure from the government and campaigners in the wake of fire in the west London tower block killed 72 people in 2017. As part of a refurbishment, combustible cladding and insulation had been fitted on the outside of the building, and in less than 20 minutes the fire climbed 19 storeys to the top of the tower, fuelled by the flammable inquiry found all their deaths were Wimpey, who did not fit the cladding on Grenfell, said "defects" which were not visible before it started fixing some of its buildings with cladding on had pushed up its costs, along with increased construction costs and new fire engineer firm has now put aside £435m in total for cladding remediation work after the £222m rise.
BBC News
16-07-2025
- BBC News
Grenfell survivors visit cladding firm Arconic's Pittsburgh HQ
Two bereaved survivors of the Grenfell Tower fire have travelled from west London to the US headquarters of cladding manufacturer Arconic. Nick Burton and Marcio Gomes made the trip to Pittsburgh, Pennsylvania to mark the recent eighth anniversary of the tragedy, which claimed the lives of 72 company was criticised by the Grenfell Tower public inquiry for its role in the refurbishment of the 23-storey tower block.A recent Netflix documentary also alleged a senior executive based in Pittsburgh was aware of the sale of its aluminium composite material (ACM) cladding for Grenfell Tower. Arconic has always denied wrongdoing and maintained its product was not unsafe. Others were to blame, it has claimed, for the incorrect installation and usage. Pittsburgh, known as the Steel City of the USA, is the home of Arconic, a multibillion-dollar global manufacturing cladding Reynobond PE 500 was used on the outside of Grenfell Tower. It was made of ACM - sheets of thin metal with a flammable plastic core. 'Systematic dishonesty' The fire at Grenfell Tower in North Kensington started in a kitchen on the fourth floor and in less than 20 minutes climbed 19 storeys to the top of the tower. The public inquiry found the cladding was the "primary cause" of the rapid spread of the fire and should not have been used on a building of that inquiry concluded Arconic promoted and sold the product knowing it presented "a significant danger" and behaved with "systematic dishonesty". Nick Burton was rescued from the 19th floor of Grenfell Tower with his wife of 30 years, Pily. Soon after she suffered a stroke and when she died became the 72nd victim of the says it was important for him to go to Arconic's Pittsburgh headquarters."For all these years they're going about their business making record profits," he says. "We wanted to give them a wake-up call and show them we are still here."Nick's friend and fellow survivor Marcio Gomes escaped from the 21st floor with his two young daughters and his then wife, who was heavily was carrying their baby son - who they'd called Logan. But while she was in a coma Logan was stillborn. He was the youngest victim of the fire. Marcio says it was "emotional" to be in the city of Arconic's HQ. "There was a lot of anger and rage but also power and strength."Nick and Marcio spoke to people on the streets of downtown Pittsburgh about their personal stories and how a local company was connected to says it was positive to meet locals who were "fantastic and really lovely" and that engaging with them was "amazing".They made the trip with friend and campaigner Moyra Samuels. "The reception was really welcoming," Moyra says. "People wanted to listen. We didn't get any negative responses, so it was really hopeful." The group also met some firefighters from a local fire department. "They knew about Grenfell but they didn't know about the links to Arconic," Nick are tougher fire safety restrictions regarding the use of ACM cladding on high-rise buildings in the US. "They had training about cladding fires but the fire chief told us Grenfell would probably not have happened in America," Marcio adds. The group's visit was documented by Pittsburgh filmmaker Chris Ivey. He's been following the Grenfell justice campaign for many years and highlighting Arconic's connection locally. He says he wants to "educate people in Pittsburgh but also to do justice to the community in London that has been suffering for so long".Over the past few years, he's put on local exhibitions and documentary films about Grenfell, laid flowers outside Arconic's offices on the fire's anniversary and also driven video billboards by the homes of their executives."Arconic have kept Grenfell very quiet in Pittsburgh," Chris says. "Even when I try to talk to local politicians, they hear it but they don't respond."If it's not happening at home they disregard it and people say 'we didn't know about this'," Chris says. "Well, they didn't want you to know." Arconic rejected this suggestion and told the BBC it had made several public statements about Grenfell, which were also made available to its local its website, the company has posted: "Arconic Architectural Products (AAP) is a leading manufacturer of composite material, pre-painted, light-to-heavy gauge aluminum and bonded sheets."With manufacturing facilities in Europe and North America, our products are produced with precision and contribute to distinctive building facades around the globe."The panels used on Grenfell Tower were manufactured by Arconic Architectural Products SAS at a factory in Merxheim, another statement made in response to the public inquiry, Arconic said: "AAP sold sheets of aluminium composite material as specified in the design process. This product was safe to use as a building material, and legal to sell in the UK as well as the more than 30 other countries in which AAP customers purchased the product."We reject any claim that AAP sold an unsafe product. AAP did not conceal information from or mislead any certification body, customer, or the public."On the eighth anniversary of the fire, Arconic said it had "made financial contributions to settlements for those impacted, and we support all efforts to strengthen regulatory oversight in the construction industry".It added that it would "fully engage with ongoing legal processes".Arconic also said American senior executives were "not responsible for products, process, markets and certifications" in other countries. "As president of the Alcoa Building and Construction Systems, Diana Perreiah supported the management of AAP SAS in relation to financial matters and strategic oversight only. She was not responsible for the performance and day-to-day running of the business." The group's visit ended with a video projection of flames at night against the outside of Arconic's office building."It looked so real," Nick says. "We never wanted to burn their building down. We need to make that clear. But to look at their building and see the flames projected, it was very emotional.""This isn't just about Grenfell," Marcio says. "This is about going forward. We need to be able to hold these companies to account.""Someone has to be prosecuted," Moyra adds. "That will bring us a sense of justice, healing and peace."The Metropolitan Police investigation into what happened at Grenfell Tower is still ongoing. They Met has said it expects it to conclude by the end of 2026.
