THE BOSS of one of the UK's largest property developers yesterday hit out against the government for its "deeply unfair" levy on housebuilders to solve the cladding crisis.

London-listed Barratt Developments has set aside £480m to fix the cladding on its buildings above 11 metres, however it is expecting to fork out another £400m over the next decade, via the new Residential Property Developer Tax, to fix buildings built by others.

In a letter addressed to Levelling Up minister Michael Gove published yesterday, CEO David Thomas said the government's approach will choke investment coming into the UK and that it "leaves no incentive for companies to base themselves in the UK or be listed on the FTSE... The unavoidable conclusion is that government is unfairly targeting established UK companies simply because it is easy to do so."

Industry body the Home Builders Federation told City A.M. that it fully supports Barratt's position.

However, Anthony Codling, CEO of online property platform Twindig and former Jefferies City property analyst, told City A.M. that the levy is unlikely to curb incoming capital.

"Whilst I think it rather unfair that housebuilders should be taxed to pay for remediation works on homes they did not build, I do not think the related taxes will impact inward investment," he said.

"It may pause whilst the details of the tax emerge, but once the structure of any developer tax is finalised, investors will base their decision to invest on the expected post-tax returns."

Gove's £3bn levy plan revealed last month, comes on top of a pledge by nearly 40 housebuilders to remediate their own buildings - spurred by the Grenfell tragedy in 2017 - which has already racked up a £2bn bill.

Barratt, which has a £4.8bn turnover and pre-tax profit of £800m, is on track to complete 18,000 and 18,250 homes this financial year, it said in its latest update yesterday.

A spokesperson for the Levelling Up, Housing and Communities Committee said that building safety is an industry-wide failure and that others should "step up".

"We make no apologies for making developers pay, rather than innocent leaseholders, and will not accept any delays," they added.

(c) 2022 City A.M., source Newspaper