TAYLOR Wimpey has said it will pay out £125 million to fund the replacement of cladding and other fire safety work on all its developments across the UK built in the past 20 years.

The money is set to be placed in a fund “in order to provide certainty for customers and leaseholders and to avoid them bearing the cost of investment to ensure their buildings are safe”, the company said.

It comes less than a month after ministers set aside £3.5 billion in funding to help repair or replace cladding more than three years on from the Grenfell Tower fire.

Taylor Wimpey said the company fund would cover any block built in the past two decades, including those less than 18 metres tall which are not eligible for government grants, including in Scotland if remedial works are required.

The firm made the announcement as it posted a 36 per cent fall in revenues in 2020 to £2.79 billion because of coronavirus, while pre-tax profits fell 68% to £264 million.

There was a 38.9% decrease in group completions, to 9,799 against 16,042 the year before, including joint ventures, primarily due to the first lockdown.

READ MORE: Persimmon sets aside £75m for work on potentially unsafe cladding post-Grenfell

In Scotland, the number of completions last year was 945, against 1,390 in 2019.

The company said it was confident the housing market will strengthen and will continue to actively buy land for future developments as orders for new homes increased.

In one new development example at South Scotstoun, South Queensferry, the total number of new homes under way is currently 341 but there is a further detailed planning application to re-plan part of the site and provide an additional 39 new homes, with 25% of the site affordable.

The masterplan for the development includes footpaths and cycle routes that will connect with surrounding areas.

Also under way are Westfield Gardens and Westfield Gate in Newton Mearns, which is 150 homes but part of a wider masterplan to create a new community that will include 625 private homes and 209 affordable homes.

Work started in July 2020 on the first area of 39 affordable homes for East Renfrewshire Council and will comprise one and two bedroom cottage flats, two and three bedroom semi-detached and a four bedroom detached home.

READ MORE: Housebuilder hails hundreds of new homes in Scotland amid strong demand

The housebuilder also announced a return of a dividend, handing out £151m to shareholders or 4.14p a share.

Pete Redfern, Taylor Wimpey chief executive, said: “We are confident in the medium-term performance of the housing market and therefore accelerated our land purchases from May 2020 as high-quality land became available at attractive rates.

“We are now focusing on driving efficiencies across the business, the rollout of our new house type range and implementing our ambitious new environmental strategy.

“The UK housing market has been resilient and continues to reinforce our confidence in our outlook.

“We are a cash generative business with a strong balance sheet, and we are pleased to announce today that we will reinstate our ordinary dividend in line with our aim of providing a reliable income stream to our shareholders.”

On the £125 million cladding fund, he said: “We have taken this decision in order to provide certainty for customers and leaseholders and to avoid them bearing the cost of investment to ensure their buildings are safe.”

The announcement comes less than a month after rival housebuilder Persimmon announced it would spend £75 million to cover the costs of replacing unsafe cladding on 26 multi-storey buildings it had built.

Robert Jenrick, UK Housing Secretary, welcomed the latest move. Shares in Taylor Wimpey closed with a 0.39% slip at 165.9p.