Last reviewed 11 February 2021
The Government will pay for the removal of unsafe cladding for all leaseholders in high-rise buildings, providing reassurance and protecting them from costs, Housing Secretary Robert Jenrick said as he unveiled a five-point plan to tackle the issue which came to light in the wake of 2017’s Grenfell Tower fire.
He told the House of Commons that the Government will fully fund the cost of replacing unsafe cladding for all leaseholders in residential buildings 18 metres (six storeys) and over in England.
Promising an extra £3.5 billion, Mr Jenrick said: “Our unprecedented intervention means the hundreds of thousands of leaseholders who live in higher-rise buildings will now pay nothing towards the cost of removing unsafe cladding.”
The Housing Secretary said that the following measures will be introduced.
The Government will pay for the removal of unsafe cladding for leaseholders in all residential buildings 18 metres and over in England.
A generous finance scheme will provide reassurance for leaseholders in buildings between 11 and 18 metres (4–6 storeys), ensuring they never pay more than £50 a month for cladding removal.
An industry levy and tax will ensure developers play their part.
A new safety regime (including a review of the construction products regime) will ensure a tragedy such as Grenfell never happens again.
Confidence will be provided to this part of the housing market including lenders and surveyors.
A tax on developers
The new tax to be introduced for the UK residential property development sector will raise at least £2 billion over a decade to help pay for cladding remediation costs.
It will ensure that the largest property developers make a fair contribution to the remediation programme, the Housing Secretary said, reflecting the benefit they will derive from restoring confidence to the UK housing market.
The proposed “Gateway 2” developer levy will be targeted and apply when these organisations seek permission to develop certain high-rise buildings in England.
The Government will consult on the policy design in due course.
Mr Jenrick said he was aware that securing appropriate professional indemnity insurance to cover the completion of EWS1 forms is proving a major barrier to qualified professionals undertaking such work.
These forms are a way for owners of residential buildings above 18 metres in height to prove to lenders and valuers that the external cladding has been assessed by an expert (see Government acts on EWS1 form crisis).
He has therefore committed to work towards a targeted, state-backed indemnity scheme for qualified professionals unable to obtain professional indemnity insurance for the completion of such forms.
Further details on the scheme, including eligibility and the claims process, will be provided in the coming weeks, the Housing Secretary said.