£4bn demand

House builders plunge as Gove gets tough on cladding

Michael Gove
Tough talk: Michael Gove

Housebuilders saw £1.6billion wiped off their value after the Government demanded they pay an extra £4 billion to fund cladding repairs on low-rise flats.

UK Housing Secretary Michael Gove warned he was prepared to take ‘all steps necessary’ to force the industry to contribute towards the cost of safety works, including restricting access to government funding.

The Government may take the matter to court if necessary to force developers to meet their obligations.

Housing firms will have until early March to agree on a fully-funded plan to cover the costs associated with removing dangerous cladding from buildings between 35 and 60 feet high.

Mr Gove outlined his tough approach to the country’s house builders in a speech to MPs.

“I am putting them on notice. If you mis-sold dangerous products like cladding or insulation, if you cut corners to save cash, we are coming for you.”

It is the third time property companies have had to dip into their pockets to fund cladding removal, having already set aside almost £1bn to fix existing buildings while another £2bn is expected to be raised from measures coming into force in April.

The removal of unsafe cladding has been a key aim for the Government following the Grenfell Tower fire in 2017, in which 72 people died.

Mr Gove’s comments sent shares in property firms tumbling, with Persimmon plunging 5.1%, Barratt Developments 4.9%, Berkeley 3.6% and Taylor Wimpey 3.5%. Mid-cap firms such as Redrow and Bellway also sank.

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