The Government announced yesterday a further £3.5bn funding for the Building Safety Fund to deal with the remediation of unsafe cladding on high-rise residential buildings. We have previously written on this topic here and here.
The Government has been under increasing pressure, particularly in recent weeks, to further extend the funding available to leaseholders in blocks of flats which have unsafe cladding. These further measures, for remediation are in addition to the already promised £1.6 billion in the Building Safety Fund.
As well as the additional £3.5 billion added to the Building Safety Fund, Robert Jenrick, the housing secretary, also announced:
- That owners of flats in lower rise blocks under 18 metres high would have access to long term, low interest government backed loans to replace unsafe cladding. The Government hopes that this means that these leaseholders would never have to pay more than £50 per month for remediation of their cladding.
- There will be a new levy applied through “Gateway 2” to developers of future high rise buildings to cover the cost of these grants. There will be a separate new tax on residential property development in the UK and it will be introduced from 2022. It is hoped this will raise £2 billion over a decade to help pay for the cost of resolving cladding issues.
- A new safety regime will be implemented, following on from the introduction of the Building Safety Bill and the associated Building Safety Regulator.
- The Government has also made a pledge to provide confidence to this part of the housing market.
Whilst it is positive that the Government is increasing the scope of funding available to leasehold flat owners, it is troubling that insufficient consideration has been given to those living in blocks under 18 metres tall with unsafe cladding. At the moment, there is considerable uncertainty which is causing huge problems for leaseholders looking to sell or refinance their properties. It is also disappointing that the Government has not widened the scope of the building safety fund to include other fire safety defects within blocks, most notably involving inadequate or no fire stopping or fire breaks often resulting in incomplete and inadequate property compartmentalisation.
We hope in the coming weeks that further announcements will be made by the Government to assist with the costs property owners are being forced to incur whilst also coping with the stress of living in an unsafe building, but it remains to be seen whether this will be done.
Edwin Coe has wide experience in dealing with cladding disputes, and assisting leaseholders in protecting their rights. If you have any further queries, then Joanna Osborne from the Property Litigation team would be more than happy to assist.
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