The government has today revealed a wide-ranging agreement that
will see industry contribute £5 billion to address the building
safety scandal.
In a victory for leaseholders, Levelling Up Secretary has agreed a solution with the
housing industry that will see developers commit a minimum of £2
billion to fix their own buildings. Industry will also pay up to
a further £3 billion through an expansion to the Building Safety
Levy.
Under the new agreement, which will become legally enforceable,
over 35 of the UK’s biggest homebuilders have pledged to fix all
buildings 11 metres+ that they have played a role in developing
in the last 30 years.
For the companies yet to make the pledge, the Secretary of State
has also confirmed there is little time left for them to sign up,
and that those who continue to refuse will face consequences if
they fail to do so.
As set out in January, a new government scheme will also see
industry pay to fix buildings where those responsible cannot be
identified or forced to in law. This follows previous
confirmation that plans for a 30-year loan scheme paid for by
leaseholders would be scrapped.
The new scheme will be funded through an extension to the
Building Safety Levy that will be chargeable on all new
residential buildings in England. This is expected to raise up to
an additional estimated £3 billion over ten years from developers
and ensure no leaseholder in medium-rise buildings faces
crippling bills, even when their developer cannot be traced.
New proposed laws, announced in February under the Building
Safety Bill, will ensure qualifying leaseholders are protected
from the costs of historical building safety defects, including
total protection against cladding costs. Today’s deal establishes
that the industry responsible - not innocent leaseholders - will
pay.
Levelling Up Secretary said:
Today marks a significant step towards protecting innocent
leaseholders and ensuring those responsible pay to solve the
crisis they helped to cause.
I welcome the move by many of the largest developers to do the
right thing.
But this is just the beginning. We will do whatever it takes to
hold industry to account, and under our new measures there will
be nowhere to hide.
The pledge published by government today commits developers who
have signed up to legally binding contracts, and to implement
their promises as soon as possible.
The detailed agreement confirms developers will:
- Act as quickly as possible to fix buildings
- Implement new proportionate guidance on building safety
- Regularly report to leaseholders and government on their
progress
- Respect an independent dispute resolution process established
by government; and
- Refund money already received from the taxpayer to fix their
buildings.
More information on how government plans to enforce the agreement
in law will be released in due course.
The government is introducing new powers that could be enforced
on a developer should they breach the agreement, as well as on
any remaining companies who fail to sign up. These new powers
would allow the Secretary of State to block those who refuse to
sign from building and selling new homes.
The government is clear that building safety is an industry wide
issue. Cladding and insulation manufacturers are yet to accept
their share of responsibility and come forward with a proposal.
The Secretary of State has also today written to the Construction
Products Association and warned he will do whatever it takes to
hold cladding and insulation manufacturers to account.
Today’s announcement follows a statement from Mr Gove in January,
when he set out a 4-point plan to reset the approach to building
safety and give leaseholders more protection against unfair
costs.
Further Information
The Building Safety Levy will be chargeable on new residential
buildings of all heights – see clause
57 in the Building Safety Bill.
Leaseholders will be contacted by their developer in due course
to confirm whether their building is covered.
The Building Safety Bill includes far reaching provisions to
protect qualifying leaseholders, in law, from the costs
associated with historical building safety defects. Qualifying
leaseholders are those living in their own homes or with up to
three UK properties in total in medium and high-rise buildings.
The Building Safety Bill will also give government, regulators,
and leaseholders and others new ways to hold to account companies
that fail to do the right thing. More information is available
here and further details on these measures will be announced in
due course.
