Thank you for contacting me about protecting leaseholders from cladding remediation costs.
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 toward remediation when the building owner cannot pay for the work.
This announcement will provide security to leaseholders and protect against excessive costs. In addition, this funding should mean that banks and mortgage lenders have certainty that remediation costs for these buildings will be paid for, and balances the Government’s commitment to helping leaseholders with a responsibility to taxpayers.
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 develops seeking permission on certain high-rise buildings and is expected to raise £2 billion over a decade. This will help ensure that taxpayers do not foot the bill for remediation and ensure large property developers contribute to the national remediation effort.
These measures will provide certainty to residents and lenders, boosting the housing market, reinstating the value of properties and getting back on track to buy and selling homes. Work is underway with lenders and surveyors to make this happen.
In addition, the new £30 million Waking Watch Relief Fund will cover the costs of fire alarms to reduce dependence on costly waking watches. The National Fire Chiefs Council has been clear that building owners should move to install common fire alarm systems as quickly as possible, which will reduce costs for affected leaseholders.
New legislation is also expected to be brought forward this year to protect future generations from similar mistakes by tightening the regulation of building safety and reviewing the construction products regime to prevent malpractice arising again.
External Wall System 1 Forms (EWS1)
The Government does not support the blanket use of External Wall System Review forms and encourages lenders to accept equivalent evidence that demonstrates buildings are safe for valuation purposes. Owners of flats in building without cladding will no longer need an EWS1 form to sell or re-mortgage their property. This is because an agreement has been reached between the Government and the Royal Institution of Chartered Surveyors, UK Finance and the Building Societies Association.
Further, the Government has announced nearly £700,000 to train more assessors, speeding up the valuation process for homeowners in cases where an EWS1 form is required. This training will be delivered by the Royal Institution of Chartered Surveyors from January.
McPartland-Smith Amendment to the Fire Safety Bill
These amendments would not protect leaseholders from all costs associated with building remediation and would delay the Bill becoming law.
The Fire Safety Bill is not the correct place for remediation costs to be addressed. The Government has already committed that it will provide an update regarding remediation costs before the Building Safety Bill returns to Parliament. In addition, work is already underway with leaseholders and the financial sector to identify financing solutions that protect leaseholders from unaffordable costs while ensuring that the cost does not fall entirely on the taxpayer. This amendment would lead to unnecessary confusion.