The cost of Remediation work – £30m

House builder Crest Nicholson has revealed that its remaining building safety work will cost more than £30 million.

The figure was calculated following a reassessment of the company’s completed sites that were in need of remediation work. In March 2024, the house builder reported that the discovery of building safety defects at four sites built before 2019 was expected to cost up to £15 million to remediate.

This has led to the house builder appointing external consultants to reassess the money required to fix building safety defects across the remainder of its sites. As of June, a review of remediation work at 140 sites is expected to leave Crest Nicholson with a bill of £31.4 million.

In its unaudited interim results for the six months ending 30 April 2024, the company explained:

 “As announced in the AGM statement in March, the Group has undertaken a comprehensive review, supported by external consultants, of the Group’s remaining cost obligations on completed sites. Initially work focused on four sites that were completed prior to 2019 when the Group closed its Regeneration division.

“Subsequently, a review has been carried out on all sites that the Group has completed but maintains an obligation to carry out remediation or maintenance prior to adoption by the relevant local authority or management company. The review of completed site costs is now concluded resulting in a one-off charge of £31.4m, of which £25.5m is treated as an exceptional item as it relates to non-standard developments started prior to the change in strategy in 2019 and the balance of £5.9m is recorded within pre-exceptional items.”

In January, it is understood that 90 of the company’s buildings were being worked on, with its total provision for building safety standing at £144.8 million. As Construction Enquirer reports, this has now been revised to £145.2 million.

Having signed the government’s developer remediation contract in March 2023, committing it to resolve any historical fire remedial work on buildings completed since 5 April 1992, the company stated it had a dedicated team in place to “manage the remediation programme and to progress work on these buildings to ensure high-quality delivery”.

As reported by Inside Housing, chief executive at Crest Nicholson Peter Truscott said:

“The group is now prioritising establishing a comprehensive roadmap to resolve these issues in a timely manner to allow the group to capitalise on its high-quality land portfolio and drive margin improvement in the future.”

Source: FPA