Thank you to all those who have contacted me about protecting leaseholders from cladding remediation costs.
I agree that decisive action is precisely what is needed to end this cladding scandal, which is why I welcome the announcement of a further £3.5 billion in funding toward cladding remediation, bringing the total funding to £5 billion.
The Housing Secretary has confirmed that the Government will fully fund the replacement of unsafe cladding for all leaseholders in residential buildings 18 metres and higher in England, which have been independently judged to be the highest risk buildings. For leaseholders in lower-rise buildings between 11 and 18 metres, a new scheme will protect against unaffordable cladding removal costs through a financing arrangement where leaseholders pay no more than a maximum of £50 per month towards remediation when the building owner cannot pay for the work. I have ensured ministers are aware of the strength of feeling about the loan and will continue to monitor the situation closely.
I welcome this reassuring announcement, which will provide security to leaseholders and protect against excessive costs. This funding should mean that banks and mortgage lenders have certainty that remediation costs for these buildings will be covered, and also balances the Government's commitment to help leaseholders while maintaining its responsibility to the wider taxpayer.
Indeed, remedying the failures of building safety cannot just be a responsibility for taxpayers. That is why plans to introduce a new Gateway 2 developer levy have also been announced, which will apply to developers seeking permission on certain high-rise buildings and is expected to raise £2 billion over a decade. This will help to ensure that taxpayers do not foot the bill for remediation and that large property developers contribute to the national remediation effort.
These measures will provide certainty to residents and lenders, boosting the housing market, and reinstating the value of properties. Work is underway with lenders and surveyors to make this happen.
Looking towards the future, new legislation is expected to be brought forward this year to protect future generations from similar mistakes and to prevent malpractice arising again. The legislation will seek to tighten regulation of building safety and to review the construction products regime to prevent malpractice arising again.
The Building Safety Bill will introduce a new era of accountability, making it clear where the responsibility for managing safety risks lies throughout the design, construction and occupation of buildings in scope. There will be tougher sanctions for those who fail to meet their obligations.
The Bill also includes provision for the building safety charge which is designed to give leaseholders greater transparency about the costs incurred from maintaining a safe building. These costs would otherwise be recovered from the annual service charge as per the terms in most leasehold agreements. The Bill includes a number of protections, including allowing the Government to limit the scope of what can be recovered from leaseholders.
Parliamentary scrutiny of any legislation is vital and I will bear in mind points raised by colleagues about this important Bill.
Under the new statutory terms, the landlord commits to the leaseholder to carry out the necessary measures, apply for any available financial support and observe the statutory requirements in relation to raising charges. In return, the leaseholder commits to the landlord to pay a fair share of reasonable charges and co-operate with the building safety regime. I was glad to learn that Ministers are particularly committed to scrutinising the issue of costs as the Bill is finalised for introduction.
The Building Safety Bill is due to be introduced after the recommendations of the Select Committee have been considered.
I know that several constituents also shared their further concerns about the costs of non-cladding building safety work. In the aftermath of the Grenfell tragedy, the independent expert panel recommendation was to focus on unsafe cladding, which is why the remediation of cladding has been at the centre of making buildings safe. Other defects in buildings are a matter for the building owners and responsible persons.
The Government intervention is based on independent advice and prioritises public safety and providing fairness both to leaseholders and the broader taxpayer, many of whom are not home-owners themselves.
Leaseholders should not have to worry about the unaffordable costs of fixing safety defects in high-rise buildings that they did not cause – and should be protected from large-scale remediation costs wherever possible. Action continues to be taken to remove unsafe cladding, support leaseholders, restore confidence in this part of the housing market and ensure a situation like the tragic fire at Grenfell Tower never arises again.
I hope this response goes some way to clarifying the government’s approach to this and thank you to those who took the time to raise this important issue with me.
