On 10 February, the government pledged an extra £3.5bn – on top of a £1.6bn pot unveiled last year – to remove unsafe cladding from high-rise buildings over 18m (or six storeys) in height. Residents of these buildings, it added, would not have to pay anything towards the cost of the works. Those in lower rise blocks (between four and six stories) will be offered loans, capped at £50 per month, for the replacement of cladding around their buildings. No plans are in place for buildings below this height.
Speaking in the House of Commons, Housing Secretary Robert Jenrick also announced a new levy on developers of future high rise buildings to pay for the fund, and a new tax on residential property development starting from 2022.
The announcement follows a raft of measures in the years following the Grenfell Tower fire, which killed 72 people.
Too little, too late?
However, the government’s announcement has been met with outcry from campaign groups and organisations such as the Chartered Institute of Building (CIOB). The Grenfell United campaign group suggested the measures were “too little, too late”, adding: “Residents living in unsafe homes will go to bed tonight worrying if their building will qualify or be left out again. And bereaved and survivors of Grenfell will lay awake fearful that what happened to us could still happen again.”
Meanwhile, the CIOB criticised the plan for its lack of detail, and called on the government to find a way of funding building safety remediation works which does not leave leaseholders “burdened with paying, even in part, for historical building safety remediation works.”
A fraction of what is needed
With some estimates putting the cost of removing unsafe cladding at a gargantuan £15bn, it is clear that the new £3.5bn fund, while a great deal of money, is just a fraction of what is needed. What is more, while the fund covers the removal of cladding, it does not stretch to the cost of fixing other fire safety issues such as problems with balconies, missing fire cavity barriers, guards for ‘waking watches’ and other restorative works to render buildings safe.
Conservative MP Stephen McPartland, who has long been a critic of the government’s handling of the cladding crisis, commented: “The support offered does not help most people because people who’ve got excessive insurance premiums, fire safety defects- that’s where the real costs are.” He continued: “Leaseholders are the innocent parties in this. Many people were in primary school when these buildings were constructed and they’ve now being hit with bills that will be bankrupting them.”
Leaseholders trapped in ‘unsellable’ flats
Since the Grenfell disaster, many flats have been rendered ‘unsellable’, with lenders concerned about the risk of unsafe cladding on the one hand, and the cost of making the building safe on the other. Homeowners have also been left unable to remortgage for these reasons, and have instead been forced onto their lender’s much higher standard variable rate.
Now, these plans could present a glimmer of hope, with lenders potentially reassured that leaseholders will not face extortionate building remediation costs that could impact on their ability to pay their mortgage. It’s important to note, however, that the UK Finance and Building Societies Association, the group representing UK mortgage lenders, has said it hasn’t yet seen the full details of the plan, meaning that their members may still be reluctant to lend in the meantime.
There is clearly a long way to go before the cladding crisis is resolved. It remains to be seen whether the government will respond to this wave of criticism through the introduction of further funding, or whether it will stand by the amount it has already invested. At Focus, we will be following the topic carefully so that we can update our Brokers on future developments.