Crest Nicholson hit with £15m bill after finding build defects on four sites

Crest Nicholson has in the last few weeks found build defects on four sites, which will cost it £15m to fix.

The housebuilder, in a short trading update today, said it has become aware of the problems since it published its full year results in January.

It said: “The group has become aware of certain build defects predominantly on four sites that were completed prior to 2019 when the group closed its regeneration and London divisions. ”These sites will require remediation over the next three years at an estimated cost of up to £15m.”

Crest Nicholson has in response appointed third party consultants to assess the sites and others completed before 2019 “to provide greater assurance on the adequacy of current provisions”.

The housebuilder said however its reservations are as expected and it has improved its sales per outlet per week to 0.52 over the past eight weeks, compared to 0.44 for the year from 1 November to date.

It said it expects to complete 1,800 to 2,000 homes in the year, compared to 2,020 the previous year.

The discovery of the build defects comes on the back of previous problems on Crest Nicholson sites announced in January.

The housebuilder in its full-year results for the year ending 31 October said it incurred an extra £11m in ‘incremental build costs’ relating to its 239-home Brightwells Yard scheme in Farnham after it was hit by delays.

It also recorded a charge of £13m to cover a legal claim the firm received relating to a fire in a low-rise block built by the group in 2021. This is separate from the £144.8m the group set aside for building safety remediation.

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In today’s update it said: “Construction at the Farnham development and other legacy sites which are still being completed is progressing largely as planned.”

These unexpected costs contributed, along with “challenging trading conditions” , to a drop of two-thirds in the housebuilder’s annual pre-tax profit last year from £137.8m to £41.4m.

Upon announcing the drop in profit in January, Crest Nicholson announced Peter Truscott was stepping down to retire, with chief operating officer Martyn Clark becoming chief executive.