Government announces measures to bring an end to unsafe cladding with multi-billion pound intervention
Housing Secretary Robert Jenrick announced (10 February 2021) that £3.5 billion will be committed to pay for the removal of unsafe cladding, adding to the £1.6 billion invested in the removal of cladding last year. Accompanying the announcement, the government unveiled its new five-point plan to bring an end to unsafe cladding, which is intended to provide reassurance to homeowners and build confidence to the housing market.
Summary of the five-point plan to bring an end to unsafe cladding:
- The Government will pay for the removal of unsafe cladding for leaseholders in all residential high-rise buildings (18 metres – 30 metres) across England
- Government backed finance scheme to provide reassurance for leaseholders in low-rise buildings between (11 metres – 18 metres) ensuring they never pay more than £50 a month for cladding removal
- An industry levy and tax to ensure developers contribute to the cost of the cladding removal
- New building safety regulations to ensure homes are made and kept safer in future
- Providing confidence to this part of the housing market including lenders and surveyors, allowing homeowners to buy and sell their properties with confidence once again
Government to pay for the removal of unsafe cladding in high-rise buildings (over 18 metres)
The Housing Secretary, Robert Jenrick, announced that the Government will pay for the removal of unsafe cladding for all leaseholders in high-rise buildings. The government announced they would provide £3.5 billion to fully fund the cost of replacing unsafe cladding for all leaseholders in residential buildings 18 metres (6 storeys) and over in England.
This will ensure funding is targeted at the highest risk buildings in line with longstanding independent expert advice and evidence, with Home Office analysis of fire and rescue service statistics showing buildings between 18 and 30 metres are four times as likely to suffer a fire with fatalities or serious casualties than apartment buildings in general.
Government backed finance scheme for Low-rise buildings (between 11-18 metres)
Lower-rise buildings, with a lower risk to safety, will gain new protection from the costs of cladding removal with a new government backed scheme offered to buildings between 11 and 18 metres. The long-term, low-interest scheme will mean Leaseholders in lower-rise buildings will not pay more than £50 a month towards the removal of unsafe cladding. This will provide reassurance and security to leaseholders, and mortgage providers can be confident that where cladding removal is needed, properties will be worth lending against.
Industry levy and tax for developers
In addition to the public funding, a new tax will be introduced for the UK residential property sector in 2022, intended to raise at least £2 billion over the next decade to ensure the sector pays a fair contribution of the cladding remediation programme.
The Housing Secretary also announced a new ‘Gateway 2’ levy on developers to be applied when they seek planning permission to build high-rise buildings in England, to offset some of the costs of replacing dangerous cladding on high-rise buildings.
New building safety regulations
To protect future generations from similar mistakes, the Government intend on bringing forward legislation this year to tighten the regulation of building safety and to review the construction products regime to prevent malpractice arising again.
Allowing homeowners to buy and sell their properties with confidence
The government is also working with the housing industry to reduce the need for EWS1 (external wall fire review) forms preventing leaseholders from facing delays and allowing homes to be sold, bought, or re-mortgaged once again. The Government will work closely with industry to design an appropriate scheme. Further details on the scheme, including eligibility and the claims process, will be provided in the coming weeks.
What does this mean for you?
Love Living Homes welcomes this announcement as a positive step forward. We hope that the new changes will bring relief to leaseholders concerned about the safety of their homes and that it will make it easier for prospective buyers, sellers and lenders to value properties, allowing this part of the housing marketing to move forward.
Whilst full details and timing of the Governments five-step plan are yet to be confirmed, please rest assured we are working closely with the appropriate bodies to ensure we can support the relevant initiatives as quickly as possible. We will be in touch as soon as we have more information in the coming months.
As always, we remain open to support our existing and new leaseholders with any of their home ownership needs, therefore if you have any further questions please do not hesitate to get in touch with us.
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