Cladding Remediation Costs

Thank you to all constituents who have contacted me regarding protecting leaseholders from cladding remediation costs. I appreciate your concerns.

A further £3.5 billion has been recently announced toward clamming remediation, bringing the total funding to £5 billion. As such, the Housing Secretary 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 is meant to provide security and protect against excessive costs and should also 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.

The Government very strongly feel that 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 ensure that taxpayers do not foot the bill for remediation and ensure large property develops contribute to the national remediation effort.

These measures should provide certainty to residents and lenders, boosting the housing market, reinstating the value of properties and getting to buy and selling homes back on track. Work is underway with lenders and surveyors to make this happen.

I am assured that Ministers in Government recognise the difficulties some people are facing on mortgages and expect lenders to do all they can to unblock these issues for leaseholders. 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 buildings without cladding will no longer need an EWS1 form to sell or re-mortgage their property – thanks to an agreement reached between the Government and the Royal Institution of Chartered Surveyors (RICS), 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 RICS from January and will mean up to 200 additional assessors will be qualified to carry out the EWS1 assessment within a month, 900 within 3 months, and 2,000 within 6 months.

There has also been a commitment to introduce a targeted, state-backed indemnity scheme for qualified professionals who are unable to secure indemnity insurance for the completion of EWS1 forms. I have been assured that further information on this scheme will be published soon.

I am also aware of amendments to the Fire Safety Bill prohibiting the passing of remediation costs on to leaseholders and tenants. These amendments to the Fire Safety Bill, though well-intentioned, would not protect leaseholders from all costs associated with building remediation, and would delay the Bill becoming law.

The Fire Safety Bill is also 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 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 taxpayers. I hope we can agree that it is important not to interrupt these discussions. Therefore, I fear this particular amendment would lead to unnecessary confusion.

Looking towards the future, new legislation is 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.

The new £30 million Waking Watch Relief Fund to cover the cost of fire alarms should also 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.


Fiona Bruce MP