Over 35 homebuilders have agreed to put £2bn towards fixing unsafe cladding and the industry will also pay an estimated £3bn over the next 10 years to fix safety issues.
Developers will commit at least £2bn to fix their own buildings and the industry will pay a further £3bn through the building safety levy.
More than 35 of the biggest homebuilders in the UK pledged to fix all the buildings taller than 11 metres that they have played a role in developing over the last three decades.
The government said that the new building safety levy” would raise £3bn over the next decade, more than internal Whitehall estimates of £500m.
Removing the material became critical after the 2017 Grenfell Tower tragedy, when more than 70 people died in a fire in a high-rise block in London, triggering an inquiry into building safety.
UK Housing Secretary Michael Gove called on companies yet to sign up to the voluntary pledge to do so, saying they would face the consequences if they do not.
“For the companies yet to make the pledge, the secretary of state has also confirmed there is little time left for them to sign up, and that those who continue to refuse will face consequences if they fail to do so,” the Department for Levelling Up, Housing and Communities said.
“The government is introducing new powers that allow enforcement on any remaining companies who fail to sign up, as well as those that breach the agreement they have signed up to.
“These new powers would allow the Secretary of State to block those who refuse to make and deliver on their commitments from building and selling new homes.”
Persimmon (PSN.L), Crest Nicholson (CRST.L), Taylor Wimpey (TW.L), Redrow (RDW.L), MJ Gleeson (GLE.L), Barratt Developments (BDEV.L), Bellway (BWY.L), Countryside (CSP.L) and Vistry (VTY.L) are among those that have signed the pledge.
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