Housing secretary Robert Jenrick has confirmed that the Government will fully fund the cost of replacing unsafe cladding for all leaseholders in residential buildings six storeys and over in England.
The announcement is the first step in a five-point plan which Mr Jenrick describes as ‘a comprehensive plan to remove unsafe cladding, support leaseholders, restore confidence to this part of the housing market’.
The second step in the plan, which will be funded by £3.5bn from the Government, is a finance scheme for leaseholders in buildings between 11 and 18 metres (four to six storeys). This will ensure they never pay more than £50 a month for cladding removal.
The housing secretary also confirmed that the Government will be introducing a ‘Gateway 2’ developer levy, which will be targeted and apply when developers seek permission to develop certain high-rise buildings in England.
There will also be a new tax on the UK residential property development sector. This will raise at least £2bn over a decade to help pay for cladding remediation costs.
‘This is a comprehensive plan to remove unsafe cladding, support leaseholders, restore confidence to this part of the housing market and ensure this situation never arises again,’ said Mr Jenrick.
‘Our unprecedented intervention means the hundreds of thousands of leaseholders who live in higher-rise buildings will now pay nothing towards the cost of removing unsafe cladding.’
The plan is part of the response to the 2017 Grenfell fire tragedy and follows the establishment last month of a national regulator to ensure building materials are ‘fit for purpose’. It also follows the announcement of a £30m fire alarm fund earlier this month.
The housing secretary’s five-point plan includes a commitment to bring forward legislation this year to tighten the regulation of building safety and to review the construction products regime to prevent malpractice.
‘Remedying the failures of building safety cannot just be a responsibility for taxpayers. That is why we will also be introducing a levy and tax on developers to contribute to righting the wrongs of the past,’ said Mr Jenrick.
‘These measures will provide certainty to residents and lenders, boosting the housing market, reinstating the value of properties and getting buying and selling homes back on track. We are working with lenders and surveyors to make this happen.'
Lord Porter, building safety spokesperson at the Local Government Association, said: 'We urge the Government to bring forward this relief as soon as possible to ease the suffering of leaseholders and prevent wider economic damage that could result if the cladding scandal continues to impact the housing market as it has done recently.
'Social landlords taking swift and responsible action to fix their dangerous buildings will also need their costs covered so they can also focus on investing in the social housing the country needs.'
Commenting on the announcement, the chair of the Housing, Communities and Local Government Committee, Clive Betts MP, said: 'The increase in the level of support the Government is providing to support the removal of cladding in certain circumstances is welcome.
'However, the arbitrary difference in the level of support depending on whether an individual lives in a building of five or six stories is unfair. These problems are not of leaseholders making and a situation where different blocks in the same development will get different support creating a two tier system of support cannot be right. Equally, the fire safety defects in modern buildings go far beyond external cladding and we will look closely at how today’s announcement addresses these wider problems, if at all.
'The devil will be in the detail and the Housing, Communities and Local Government Committee will look closely at the proposals to understand the true impact, particularly what support there will be for Housing Associations and Local Authorities.'