ANNOUNCING ITS FINANCIAL results for the year ended 31 December 2020, Taylor Wimpey plc has pledged to meet the costs to make their apartment buildings safe.
In a £125 million provision for 2021, the company has said it will cover the costs to bring buildings constructed in the last 20 years up to the current External Wall Fire Review (EWS1) requirements. The funding will be for apartment blocks both over and below 18 metres height.
The company stated:
This is a complex and exceptional situation, but Taylor Wimpey is focused on doing the right thing for its customers. The Board has determined that we will fund and oversee the improvement works of apartment buildings in our ownership, regardless of eligibility for the UK Government Building Safety Fund, to make them safe and mortgageable by achieving EWS1 certification.
Taylor Wimpey Funding
Taylor Wimpey is also offering funding when it no longer owns the building if the building is not eligible for government funding under the the Building Safety Fund.
If a freeholder produces a “fair and proportionate plan” for fire safety improvement works following EWS1 assessment, the company has said it will contribute funding to bring those buildings up to safety standards.
The company has also committed to providing advice and other assistance where appropriate.
Steven Truman, MD of cladding remediation specialists Cladding Consulting, said: “This is obviously very good news for leaseholders in Taylor Wimpey-built developments.
“But there are still hundreds of thousands of leaseholders in buildings where the developers have gone out of business or are not prepared to remediate and where there are no collateral warranties or other avenues to funding other than the Government grant.
“These leaseholders are relying on Government funding, but the route to obtaining these funds is proving a long and complicated process and many applicants, currently more than 1,000, have not progressed beyond submitting a registration of interest.
“This is where the real problem lies; a substantial number of applications are stalling at the registration of interest stage, as leaseholders struggle to understand the application process.
“More assistance is needed to help leaseholders through the bureaucratic maze. They need to receive remediation funds as soon as possible so that they can get their lives back on track and not be trapped in an unsellable home through no fault of their own.”
Taylor Wimpey’s building safety provision comes as the company’s financial results showed a 38.9% decrease in Group completions to 9,799, down from 16,042 in 2019. The decrease is primarily due to Q2 site shutdowns the company says. Revenue dropped to £2,790.2 million from £4,341.3m the previous year, with profit for the year of £217.0 million (2019: £673.9 million)
However, the company proposed a 2020 final dividend of c.£151 million (4.14 pence per share), subject to shareholder approval.
In 2021, Taylor Wimpey expects to deliver 85-90% of 2019 volumes, aiming for a medium term operating margin target of c.21-22%. It says it expects overall build cost inflation in 2021 to be marginally lower than in 2020 levels of 2-3%. In 2021 the company states it expects its operating margin to increase to between 18.5% and 19% with a 2021 year end net cash of broadly £500 million.
Meanwhile, between re-entering the land market in 2020 and 26 February 2021, Taylor Wimpey agreed terms on and purchased 30,956 plots and expects its landbank to grow by over 10,000 plots over the next 12-18 months.