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Tuesday, January 25, 2022

Cladding: More flat owners to be freed from bills


Flat owners will not have to pay to remove dangerous cladding from lower-height buildings under new government plans, BBC Newsnight understands.

Leaseholders in buildings ranging in size from 11 to 18.5 million square feet will no longer be required to take out personal loans to cover the cost of the work.

Instead, the government will attempt to secure up to £4 billion in costs from developers.

It had previously promised to pay for the removal of cladding from taller buildings.

If ministers are unable to secure funding from developers, the housing department’s budget may be used.

Following the Grenfell Tower fire in 2017, which killed 72 people, flammable cladding and other fire safety flaws were discovered in hundreds of blocks of flats across the UK.

Cladding removal can cost millions of pounds per block, with individual flat owners often footing the bill under England and Wales’ leasehold system.

Hundreds of thousands of people are still living in dangerous tower blocks four years after Grenfell, while many flat owners have been saddled with spiralling insurance costs, service charges, and the requirement for costly 24-hour “waking watch” patrols in case of fire.

Michael Gove, Secretary of State for Levelling Up, Housing and Communities, will tell the Commons in a new package of measures to be announced next week that if developers refuse to pay for cladding removals voluntarily, the government will threaten them with legal compulsion.

According to the BBC, Mr Gove will warn them next week that he is putting them “on notice.”

Previously, the government committed up to £5 billion to remove dangerous cladding from buildings taller than 18.5 metres.

Cladding campaigners have long urged the government to accept both the principle that buildings under 18.5m should be covered and the principle that leaseholders should not be required to pay.

Newsnight has seen documents from Chief Secretary to the Treasury Simon Clarke to Mr Gove where he says:

  • That no new Treasury funding will be available to pay for this extra work
  • That the cost of the extra cladding removal must not exceed £4bn
  • That this new provision will cover cladding only, rather than other fire safety defects
  • That if Mr Gove is unsuccessful in persuading or compelling developers to pay for the costs that it must be paid for from existing housing budgets and that “safety should be prioritised over supply”

Experts question whether £4bn will be sufficient to cover cladding in buildings under 18.5m.

And cladding is not the only or even main problem in thousands of buildings across the country.

‘A step forward’


Neighbors Darren Matthews and Mandy Sandhu may benefit from the changes because their building is 13.5m tall.

Mr Matthews told BBC Breakfast that they faced bills of £101,500 per apartment and described the move as a “step forward,” saying he was “cautiously optimistic” but that “no absolute clarity about how developers are going to pay” existed.

“With the best will in the world, this issue will not be resolved on a voluntary basis; it must be enshrined in law as a legal obligation with appropriate stipulations to the building industry,” he said. “The only innocent parties in this are the leaseholders.”

Ms Sandhu stated that she did not eat or sleep due to the stress, and that despite the news, they needed clarification on what would be done.

“I’m not going to believe it until I see it,” she added.

It is unclear how those leaseholders will pay their bills, or how quickly any money received from developers will be available.

Developers have largely insisted that their projects were built in accordance with regulations and that they are thus not liable.

Without immediate compulsion, this process risks dragging on indefinitely, trapping leaseholders in properties they cannot sell.

Stewart Baseley, chairman of the Home Builders Federation, which represents developers, stated that the largest house builders had already spent or committed to spending £1 billion to remediate affected buildings, and that the most pressing action was for the government to define guidance on what work was actually required to resolve issues for residents.

While house builders were “committed to playing their part,” he added that other organisations involved in the construction of affected buildings, “not least material manufacturers who designed, tested, and sold materials that developers purchased in good faith that were later proven to be unfit for purpose,” should also be included in remediation costs.

Hundreds of thousands of leaseholders have already received or will soon receive bills for fire remediation work.

It is also unclear whether these measures will be sufficient to reestablish market and lender confidence in new-build properties.

Campaigner Steve Day told BBC Radio 4’s Today programme that he and his neighbours were facing a £31,000 cladding bill, as well as around £5,000 in non-cladding costs and an additional £3,000 a year service charge, which he described as “huge” for south-east London.

“People are dealing with arrears and high levels of stress,” he explained.

He expressed concern that voluntary contributions would “just not be deliverable,” and advocated for a scheme in which the government would make developers pay if they violated regulations.

Following the Grenfell fire flammable cladding and other fire safety defects were discovered in flat blocks across the UK

The chairman of the all-party parliamentary group on leasehold and commonhold reform, Conservative MP Sir Peter Bottomley, said the government needed to tell insurance companies to “come to the table” with £8 billion so that “innocent leaseholders will live in homes that are safe and saleable.”

Matthew Pennycook, Labour’s shadow housing minister, tweeted the new measures “appear far less significant than they sound”, with “nothing on non-cladding defects, no new developer levy and the position on leaseholder liability unchanged”.

Many leaseholders have found their properties effectively worthless and unmortgageable.

In November, Mr Gove questioned why flat owners should have to pay anything for dangerous cladding to be removed from their buildings.

He said the government had a responsibility to help leaseholders – who were “innocent parties” – with the huge costs.

The Department for Levelling Up, Housing and Communities declined to comment.

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