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

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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.

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Christopher Marsden

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20:38 PM, 11th February 2021, About 3 years ago

Reply to the comment left by terry sullivan at 11/02/2021 - 19:24
Cost, insulation values, availability, durability except in a fire which they (the suppliers) failed to declare.

terry sullivan

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20:43 PM, 11th February 2021, About 3 years ago

Reply to the comment left by Christopher Marsden at 11/02/2021 - 20:38

my point was more about why standard building materials needed cladding?

Shining Wit

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11:35 AM, 13th February 2021, About 3 years ago

The leaseholders didn't specify the materials or build quality, they didn't design or build the property, or set the regulations. They didn't sign-off to say that the building or materials met the regulations (they didn't but someone else signed it all off). Now they find that the materials didn't meet the spec, and further (expensive) investigation (charged to the leaseholder) shows other cost-saving measures were taken (typically not bothering with costly safety requirements like fire barriers or doors, or using non flammable materials) - presumably to increase developer profits.
Some buildings are now deemed unsafe for occupation - so residents have been physically escorted from the buildings unless/until Waking Watch (costing hundreds of pounds a month per flat) is established and retained until the remedial works are completed (all at LH expense).
Leaseholders didn't cause the problem, and have no say in how it is fixed - they have to pay to fix it, while continuing to live in unsafe buildings. The cost, somewhere between £20,000 and over £100,000 (not a typo) per flat - typically added to service charge or Section 20 demands....
If it is shared ownership, the part-owner LH pays 100% of the bill.

Other than bankruptcy and suicide (and there are several cases of each, directly attributed to this ongoing scandal) - there is no escape for the LH - they can't sell, remortgage or rent out...

The government grant fund covers cladding remediation but, apparently, not any other safety issues on the taller buildings.
Presumably LH will be liable for all these costs.
Smaller buildings are eligible for loans (unspecified whether these extend to all safety aspects). The loan is registered against the flat - thus immediately reducing the value of the flat...

Here's a comment I saw on another forum:

If family/friends want to know why you're not celebrating the announcement, it's a) because we're waiting to read the small print and b) the government is only talking about ONE aspect (cladding) when about eight or nine aspects have been identified as impacting fire safety and costs on leaseholders.
It's like the government offering to replace the tyres on your car if you own a BMW or Audi, but not the air bags or engine or lights or indicators or brakes, all of which have been identified as a costly problem. And if own a different brand of car, then you don't qualify.
Hopefully it's an analogy that many people will understand.

The government announcement isn't a solution. It is an acknowledgement that there is a huge issue which needs a resolution. It is a (small) step in the right direction - but a lot more needs to be done.

I think we will all be hearing a lot more about this in the future.

Christopher Marsden

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14:18 PM, 13th February 2021, About 3 years ago

Reply to the comment left by Shining Wit at 13/02/2021 - 11:35
As I mentioned earlier the true cost of this travesty is yet to be revealed but this morning on radio 4 one authority said that they considered the amount the Government has committed to is woefully short and they thought it could be £15 billion but there's no national record of buildings that suffer from defective cladding and other fire related defects ie fire stops etc. So no-one knows how much this is going to cost. Grenfell was so bad it's unbelievable. How can a 24 storey building have one means of escape and then that single way out is not protected by detection and alarms plus sprinklers and fire doors that of 1 or maybe 2 hour fire resistance. I think it's owned by the local council!!!!!!
Don't just blame the builders here many local authorities chose these external cladding materials to refurbish blocks that may well have been cladded with concrete panels that were coming to end of Life and bad for condensation. They chose the materials used because it was cheap compared to alternatives and gave good insulation. God knows how many guilty parties are involved in this which may well be a barrier to legal recourse. If every building needs separate legal recourse God help the lease holders. Maybe if the lawyers went for local authorities and central government collectively on the basis that government systems had been defective the leaseholders could join together but I don't know if that's viable legally.
If that strategy can be developed then Jenrick might just have the tiny bit of grey matter required to see the height of the buildings affected is imaterial here.
Surely someone has talked to lawyers to see if there is a magic bullet that joins these cases together.


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15:03 PM, 13th February 2021, About 3 years ago

Reply to the comment left by Christopher Marsden at 13/02/2021 - 14:18
Grenfell WAS Council owned and was an old building given a cladding "facelift" by the local social housing authority to modernise it. However, every other fire security installation required by new builds, such as I bought into, was ignored or dismissed. My development, although clad in some form of aluminium composite which may or may not be hazardous as tests proved inconclusive, has state of the art fire measures and this was confirmed by a professional fire expert appointed to investigate the matter by the developers. It cannot be compared to Grenfell but it has been - as has so many other new builds unfairly caught up in this building scandal. I would not deny that any outer covering that makes a building suspect should without further delay be replaced but newer developments should not automatically be assumed to be as badly built as Grenfell. Grenfell is a shocking testament to greed and cost cutting that ultimately resulted in the unnecessary and avoidable loss of life. I shudder to think what the repercussions would have been had Grenfell been privately owned. Especially for BTL investors like myself. No doubt the UK government and the local council would have hounded us all into bankruptcy and been intent on pursuing us through the courts.
Innocent leaseholders have been forced to carry the burden of this failed litany of building regulations without recompense.
And recompense is exactly what they should be given.

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