The government's £5 billion investment for building safety has been slammed by critics for not going far enough.
Yesterday the government said that “hundreds of thousands of leaseholders will be protected from the cost of replacing unsafe cladding on their homes", as housing secretary Robert Jenrick unveiled a five-point plan.
Jenrick said that the government would fully fund the cost of replacing unsafe cladding for all leaseholders in residential buildings 18 metres (six storeys) and over in England.
The government said: “This will ensure funding is targeted at the highest-risk buildings in line with long-standing independent expert advice and evidence, with Home Office analysis of fire and rescue service statistics showing buildings between 18 and 30 metres are four times as likely to suffer a fire with fatalities or serious casualties than apartment buildings in general.”
Lower-rise buildings, which the government said had “a lower risk to safety”, will gain new protection from the costs of cladding removal with "a generous new scheme offered to buildings between 11 and 18 metres” to pay for cladding removal where it is needed through a long-term, low-interest government-backed financing arrangement. Under the scheme, the government says no leaseholder would "ever pay more than £50 a month towards the removal of unsafe cladding" and it says "this will provide reassurance and security to leaseholders and portage providers can be confident that where cladding removal is needed, properties will be worth lending against".
The housing secretary also announced plans to introduce a ‘Gateway 2’ developer levy. The proposed levy will be targeted and applied when developers seek permission to develop certain high-rise buildings in England.
In addition, a new tax will be introduced for the UK residential property development sector. This will raise at least £2 billion over a decade to help to pay for cladding remediation costs. The tax will ensure that the largest property developers make a fair contribution to the remediation programme, reflecting the benefit they will derive from restoring confidence to the UK housing market. The government said it would consult on the policy design in due course.
The government also said it will "protect future generations from similar mistakes by bringing forward legislation this year to tighten the regulation of building safety and to review the construction products regime to prevent malpractice arising again".
Jenrick said: “This is a comprehensive plan to remove unsafe cladding, support leaseholders, restore confidence to this part of the housing market and ensure this situation never arises again. 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.
“Remedying the failures of building safety cannot just be a responsibility for taxpayers. That is why we will also be introducing a levy and tax on developers to contribute to righting the wrongs of the past."
But some said the measures did not go far enough. Kate Henderson, chief executive of the National Housing Federation, which represents housing associations – social landlords to more than 6 million people – says: "This additional funding and reconfirmation of the government’s commitment to building safety is hugely welcome. This is something we have been calling for along with leaseholder groups, and we are glad to see the government using this opportunity to prioritise buildings most at risk.
"Unfortunately, there are still people in buildings with safety issues who will still face costs. It is good that the government is trying to make these costs manageable for leaseholders, but overall we do not think it is right that leaseholders should pay for any failings of unfit building regulations.
"We are still very concerned about the impact of covering remediation costs on social housing providers and their residents; people who are so far forgotten in this crisis and for whom there is no funding. Not-for-profit social housing providers estimate they will have to spend in excess of £10 billion to make all their buildings safe. This money is being diverted away from providing services and maintaining the homes of people with the lowest incomes in this country as well as building new affordable homes for those in need."
Mayor of London Sadiq Khan said the measures "fall far short of what is needed". He said: "It is shameful for ministers to tell some leaseholders that they will have to pay to fix building safety problems they played no part in causing. Three-and-a-half years after the Grenfell Tower fire, thousands of Londoners are still living in fear, stress and uncertainty. While further financial support is welcome, the funding proposals announced today amount to a leaseholder lottery – they are not a solution for all unsafe buildings and fail to protect many leaseholders from facing huge costs. I have been clear – no leaseholder should be burdened with the cost of removing unsafe cladding, and forcing anyone to take on debt is simply unacceptable.
“It is welcome that ministers have accepted the principle of my proposals for a levy on developers. They must now introduce this without any further delay."
The Grenfell tragedy laid bare failings in the building industry dating back 30 years.