London housing association puts contractors on notice as it takes £105m safety repairs hit

Metropolitan Thames Valley Housing has told contractors it will be looking for them to stump up cash after the group said it would be hit by £105m in write-downs and one-off cost provisions relating to fire and building safety works.

The 57,000-home housing association, which operates across London and the South-east as well as the East Midlands and the East of England, said yesterday it was revising down its 2023/24 expectations for both its overall surplus and its operating surplus as a result. 

The group’s chief financial officer, Ian Johnson, has said it will ask contractors to help foot the bill, adding it will recover costs from third parties “wherever possible”.

He added: “We are committed to bearing these costs, even though we are not responsible for the fire safety issues that, in large part, reflect defects in the course of original building construction.”

In 2022/23 it posted operating surplus of £109m and pre-tax surplus of £33m.

But in an update yesterday, the association said it has now decided to recognise the costs, which relate to its decision to cover building safety remediation bills for leaseholders,  in its 2023/24 accounts.

It added: “As a result of changes in building safety legislation and MTVH’s own commitment to protect its leaseholders, the estimated costs of fire safety works to leaseholders’ properties (assumed in our overall five-year fire safety works programme) will be fully provided for in the current year. As part of the same full review, MTVH has written down the value of other buildings where future expected life is materially reduced.”

The group announced last April that it would not be passing on any building safety remediation costs to leaseholders in buildings higher than five storeys.