Housebuilders’ share prices plunge as government cracks down on cladding crisis
Homebuilders’ share prices tumbled on Monday as the government said it was prepared to force developers to pay for the removal of dangerous cladding.
Housing minister Michael Gove has handed builders a March deadline to agree a plan to protect leaseholders who cannot sell their homes due to their fire defects.
Leaseholders have called on the government to issue more financial aid to help flat owners excluded from existing funding.
Residential developer Bellway saw shares down four per cent while Taylor Wimpey dropped three per cent on Monday afternoon.
FTSE-100 firm Berkeley also took a three per cent hit to its share price while shares in Barratt Homes sank almost five per cent.
In a letter to developers, Gove said far too many builders had “failed to live up to their responsibilities” by funding remedial works on tower blocks with unsafe cladding.
“It is neither fair nor decent that innocent leaseholders, many of whom have worked hard and made sacrifices to get a foot on the housing ladder, should be landed with bills they cannot afford to fix problems they did not cause,” Gove added.
Developers have been asked to make voluntary contributions to a £4bn fund to remediate unsafe cladding on 11-18 metre buildings.
Firms were also asked to fund and carry out all required works on tower blocks over 11 metres that they have developed.
Leaseholders told CityA.M. they were also facing hefty bills for non-cladding issues, such as wooden balconies.