The developer is the first to sign the pledge, which requires it to fund the costs to remove unsafe cladding from high-rise buildings between 11 and 18 metres tall.
In January, Secretary of State for Levelling Up, Housing and Communities, Michael Gove, gave developers until March to provide a solution for the cladding crisis. This was later extended to 5 April following discussions between the government and developers.
Gove warned firms that the government could utilise legal routes to make developers pay to fix cladding on buildings, and threatened companies with wider commercial consequences.
Crest Nicholson said in its announcement: “Failing to agree to these new guidelines would carry further consequences, implemented by Department for Levelling Up, Housing and Communities (DLHUC), that would impact the group’s ability to operate and trade normally within the housing market.
“These restrictions will be enacted in law through proposed amendments to the Building Safety Bill which is currently passing through Parliament.”
The developer said it believed signing the pledge was in its best interests and would support those living in affected buildings.
As a result of signing the pledge, the group will need to record a further exceptional charge in its financial statements, it said. It also promised to “work at speed” to refine the estimated costs. Crest Nicholson added that it was considering whether further regulatory approvals would be needed in respect of the proposed charge.
The developer said that since the Grenfell fire in 2017 it had “acted swiftly” to identify and remedy its legacy buildings, and has incurred cumulative net charges of £47.8m since the year ended 31 October 2019.
It is also contributing to the Residential Property Developer Tax (RPDT), effective from 1 April 2022, to support the remediation of all affected buildings taller than 18 metres in the UK.
The group said it did not expect the costs to present a risk to current or future operations, given its financial position and trading performance.
Its most recent financial results showed it ended the year with net cash of £252.8m. An update is due 14 June 2022.
