Government will fund cost of replacing unsafe cladding for all leaseholders 6 storeys and over

Government will fund cost of replacing unsafe cladding for all leaseholders 6 storeys and over

15:03 PM, 10th February 2021, About 3 years ago 15

Text Size

Hundreds of thousands of leaseholders will be protected from the cost of replacing unsafe cladding on their homes, as Housing Secretary Robert Jenrick unveiled a five-point plan which will provide reassurance to homeowners and bring confidence to the housing market.

With an unprecedented £5 billion investment in building safety, including £3.5 billion announced today (10 February 2021), the Housing Secretary confirmed to the House of Commons that the government will 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 long-standing 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.

Lower-rise buildings, with a lower risk to safety, will gain new protection from the costs of cladding removal with a generous new scheme offered to buildings between 11 and 18 metres. This will pay for cladding removal – where it is needed – through a long-term, low interest, government-backed financing arrangement.

Under the scheme, no leaseholder will ever 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.

The government is working with industry to reduce the need for EWS1 forms, preventing leaseholders from facing delays and allowing hundreds of thousands of homes to be sold, bought, or re-mortgaged once again.

The Housing Secretary today announced plans to introduce a, ‘Gateway 2’ developer levy. The proposed levy will be targeted and apply when developers seek permission to develop certain high-rise buildings in England.

In addition, a new tax will be introduced for the UK residential property development sector. This will raise at least £2 billion over a decade to help pay for cladding remediation costs. The tax will ensure that the largest property developers make a fair contribution to the remediation programme, reflecting the benefit they will derive from restoring confidence to the UK housing market. The government will consult on the policy design in due course.

The government will protect future generations from similar mistakes by bringing forward legislation this year to tighten the regulation of building safety and to review the construction products regime to prevent malpractice arising again.

Today’s measures will mean people living in homes which they have been prevented from selling, or re-mortgaging, through no fault of their own, will now be able to move on with their lives.

Housing Secretary Robert Jenrick said: “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.

“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.

“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.

“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.

“Our landmark intervention will make homes safer and free those who did the right thing – saving for years to get on the property ladder – to enjoy the homes in which they have invested so much.”

Barclays: “Barclays welcomes this announcement as a positive step forward. These changes will bring greater certainty and clarity for homeowners, prospective buyers and surveyors.

“We expect that will make it far easier for buyers, sellers and lenders to value properties, aiding this part of the housing market to start moving again.

“Barclays remains open to support our customers and prospective buyers with any of their home ownership needs, including in this part of the market.”

Joe Garner – CEO Nationwide Building Society said: “Nationwide welcomes the £3.5 billion grant funding the government has announced to ensure the cladding on peoples’ home is safe and to protect the people who live in them. This is a decisive step forward which we hope brings some relief to people worried about the safety of their homes.

“Supporting people who find themselves living in this difficult position could not be more important. We look forward to working with government, lenders and other interested parties to understand the details and implement the initiative quickly.”

The government is aware that securing appropriate professional indemnity insurance to cover the completion of EWS1 forms is a major barrier to qualified professionals undertaking EWS1 forms. The government is therefore committing today to work towards a targeted, state-backed indemnity scheme for qualified professionals unable to obtain professional indemnity insurance for the completion of EWS1 forms.

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.

The Grenfell tragedy laid bare failings in the building industry dating back 30 years. Today’s announcement is a further step by the government to bring about the biggest changes to building safety in a generation, ensuring people are safe and feel safe in their own homes.

The measures build on steps already taken to support leaseholders, including £1.6 billion of funding to remediate unsafe cladding, the £30 million Waking Watch fund to help end unfair and excessive costs and new legislation in the Building Safety Bill which will ensure homes are made and kept safer in future.

Share This Article


Adam Hosker

16:00 PM, 10th February 2021, About 3 years ago

It's about time.


10:35 AM, 11th February 2021, About 3 years ago

What are your thoughts for those living in flats less than 18m high?

Dennis Forrest

10:40 AM, 11th February 2021, About 3 years ago

As LKP website states:- Freeholders who own the buildings still not being asked or forced to make a contribution to cladding costs.
Some unfairness in that leaseholders above 18 metres will get grants to meet the recladding costs whereas those below 18 metres will get loans instead costing £50 per month probably taking at least 30 years to pay off which will affect selling prices of those properties as new buyers of those flats will presumably have to continue to make those loan payments.
It does not help the situation that some managing agent are also adding 15% on top of the cost of remedial works as their fee for supervising the work.
A lot of builders/developers are trying to get out of doing remedial work by saying the flats were built to building regulations at the time. Some conveniently forget that to mention that they left out firebreaks in the cavities which were part of building regulations at the time. I do not know whether this was due to expense or just laziness? After all it will all be covered up by the cladding anyway, who will notice?


12:13 PM, 11th February 2021, About 3 years ago

The UK government has actually just paid lip service to a building scandal that they hope appeases the situation. It resonates with such egregious misunderstanding, whether deliberate or ignorant, as to make me even more furious as one of those leaseholders caught up in this fiasco. I should never have been made responsible to correct building defects at ANY time.
The issue of further fire hazards ie fire breaks, cavity walls, wooden balconies et al has been ignored but will still need addressing by leaseholders under the elusive EWS1 certificate. And to add insult the huge costs of waking fire watches, spiraling building insurance costs, or no insurance at all as insurance companies won't insure buildings with inflammable products, has been dismissed.
The UK government has failed innocent leaseholders who bought property built in accordance to all the existing legislated building guidelines at the time. Surveyed and signed off by all the appropriate organisations and happily provided with mortgages by various lenders.
Building development companies have earned in excess of GBP15 billion since Grenfell burnt down and had a further GBP10 billion tax payer funds given to them to carry on building.
Leaseholders have had their properties assigned a nil value and are unable to sell or rent them. Instead of being compensated for a not fit for purpose property they have been told to correct the defects at their cost whilst having no input in it's initial construction.
There is no other industry that would be permitted to supply a sub standard product and not be held responsible to replace it at full value once that defect was known.
I can only deduce from the above that, although the UK government blather on about home ownership, it is not committed to home owners. It is committed to those big business party line donors who swell their coffers come election time.
Shame and shame on them again and again.


12:21 PM, 11th February 2021, About 3 years ago

Reply to the comment left by Ly at 11/02/2021 - 10:35
It's a travesty of injustice. Unsafe is unsafe and is not limited to height or cladding.
ALL leaseholders affected by buildings that can be classed as fire hazards should be compensated fully.

Christopher Marsden

14:21 PM, 11th February 2021, About 3 years ago

Do you think it's possible that we are being drip fed an acknowledgement of liability by local /Central government bit by bit on the basis that say £5 billion sounds much better than maybe £20 billion or whatever the true cost is.
If this was America you would see a joint action against all the perpetrators which include the dreadful US/French company that conned the industry into believing that this stuff had zero spread of flame and then managed God knows how to get an agre'mont certificate to enable it's sale, followed by the consultants whose PI insurance should be paying for some of this, followed by the design and build contractors, followed by the building inspectors and their councils.
I studied for a building engineering degree in 1973 and we were taught not to design and construct in the way that many of these buildings seem to have been put together. We have gone backwards here and unless someone does time for it we will not learn the lessons.
When Director's think they may serve time for doing wrong it changes their behaviour. Of course not all are bright enough to know they are doing wrong but the French sales directors for the Grenfell cladding did know.

Christopher Marsden

14:27 PM, 11th February 2021, About 3 years ago

Sorry Dale I should have added that I agree with all you have said and you have my deepest sympathy. Is there any joining up of the wronged leaseholders or property owners that are suffering here? Now Jenrick has come out and said this surely legal opinion is necessary as to whether this makes an action for all buildings available viable. Since it happened historically is there any chance of the European Court of Human rights getting involved because that's the kind of boot Jenrick needs up his arse to sort this.


16:08 PM, 11th February 2021, About 3 years ago

Reply to the comment left by Christopher Marsden at 11/02/2021 - 14:27There is no doubt that the UK government is attempting to appease leaseholders in order to protect the industry and its players Chris. There are various Facebook cladding groups who have attempted to bring this building scandal to the notice of public servants and media. It definitely warrants a class action. A defective product has been sold to unsuspecting and innocent buyers who have been forced to accept liability because the building industry and it's allies are a powerful conglomerate who appear untouchable. That should be challenged in a court of law as it would be were this a defective vehicle. Unfortunately I do not live in the UK and never have. If I did I would galvanise a swell of like minded owners to seek legal assistance in being compensated for a litany of woeful building regulations, that go far beyond just cladding, and has resulted in all of us living in or owning what are essentially death traps that we can do nothing with. Several million owners that for the last 4 years have stagnated in the property market and whose homes are considered worthless and hazardous whilst being forced to reside in them.
It should be untenable to any homeowner. And the people who should be held responsible are escaping due attribution because the UK government has fumbled a desultory response that protects those people.
Why do we allow it?

Ed Regent

17:51 PM, 11th February 2021, About 3 years ago

When a conservative MP (Stephen McPartland) tweeted the following it sums the whole sorry mess up: “It is a betrayal of millions of leaseholders. It is not good enough. It is shocking incompetence." I think it might well become the Tories' 'student fees' albatross come the next election.

terry sullivan

19:24 PM, 11th February 2021, About 3 years ago

why was cladding needed? who decided?

1 2

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership


Don't have an account? Sign Up

Landlord Tax Planning Book Now