Michael Gove, the levelling up secretary, is closing in on a multibillion pound deal with Britain’s biggest housebuilders to help resolve the national cladding crisis exposed by the 2017 Grenfell Tower disaster.
Sky News has learnt that major companies including Barratt Developments and Persimmon are preparing for the imminent signing of a legally binding contract with the government that could ultimately cost the industry £5bn or more.
One executive said they expected the final contract to be signed and unveiled as soon as next week, although they cautioned that the timing remained fluid.
Last year, dozens of developers signed a pledge to fix buildings constructed since the early 1990s, with revisions to the deal with government in recent weeks having focused on the scope of companies’ exposure.
The City watchdog is thought to have been involved in discussions with the industry about whether signing the contract would require the approval of shareholders in listed companies such as Barratt, Persimmon and Taylor Wimpey.
Sources have estimated the cost of the new Residential Property Developers Tax at up to £3bn and the bill for self-remediation at around £2bn.
A further tax on the industry could raise £3bn, industry executives have concluded, leading some companies and investors to warn that the sector risks seeing a flight of capital.
Earlier this month, the Department for Levelling Up, Housing and Communities said it was “finalising the legally binding contracts that developers will sign to fix their unsafe buildings, and expect them to do so very soon.
“We will not accept any backsliding on their commitments.
“It is building owners’ legal responsibility to make sure that all buildings are safe.”
FTSE-100 housebuilders have already taken significant financial…
