UK house building giant, Barratt Redrow, has identified legacy building safety defects within its portfolio, incurring costs of around £248 million to the business.
In a trading update, issued this morning, the housebuilding company said safety issues had been found at two developments, impacting costs in the second half of FY2025.
“In our Southern region, we identified fire safety related issues at a development involving four buildings which were completed in 2002,” Barratt Redrow said.
“The remediation and associated costs with respect to these four buildings are estimated to be £80 million.
“Additional costs of £18 million have been recognised relating to a number of newly identified issues at a large development in London which was already part of our [External Wall System] provision, including both fire safety and reinforced concrete frame design remediation costs.”
As part of the £2.5 billion merger between Barratt Developments and Redrow, cleared in October last year, Barratt Redrow absorbed remediation costs for reinforced concrete frame defects at up to five Redrow developments in London, whose total it now estimates at £150 million – triggering a goodwill adjustment of £106 million for the company.
However, Barratt Redrow won a Supreme Court ruling in May which also recognised the responsibility of the supply chain in correcting safety defects. The company added: “We continue to actively seek to recover costs from third parties in respect of issues around fire safety and reinforced concrete frames.”
For the year ended 29 June 2025, Barratt Redrow had a net cash position of £772 million, down from £868.5 million the year prior, and an undrawn RCF of £700 million.
For FY2025, the group expects to deliver adjusted profit before tax of £582.6 million, underpinned by a “strong” balance sheet and forward sales position.
Barratt Redrow has committed to a £29 million contribution to the affordable housing programme in the UK – its share of a £100 million collective payment with six other housebuilders – following the Competition and Markets Authority (CMA)’s ongoing investigation in the housebuilding sector.
Source: Construction Wave