BREAKING: Government to foot £5 billion tower cladding remediation costs bill

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Leaseholders in buildings over 18 metres or six storeys high are to have their remediation costs paid by the government where the freeholder or original contractor is unwilling or unable to do so.

The announcement was made by Housing Secretary Robert Jenrick (pictured) in a statement to parliament today, revealing that he was to make an ‘exceptional intervention’ on behalf of the government that leaseholders in high-rise towers will face no cost for remediation works.

But Jenrick said the decision to only cover towers over 18 metres was based on advice that the ‘overwhelming risk’ to life and limb came from dangerous cladding on these buildings, and that properties with cladding that are under 18 metres were unlikely to need remediation work and that the risks were ‘significantly lower’.

But towers and buildings of between four and six storeys high will not be covered by the new scheme, and property owners will instead receive long-term, low-interest loans to pay for work that will not exceed £50 a month cost – rather than grants.

New cash

Jenrick said the new cash, along with previous promises, brought the government’s total spend on the cladding scandal to £5 billion.

The housing minister said his decision was generous and fair to leaseholders but the Leasehold Knowledge Partnership (LKP) has labelled the decision, “a bitter disappointment for leaseholders everywhere”.

A spokesman adds: “It is shameful to treat leaseholders differently depending on an arbitrary factor like building height.

“Leaseholders in tens of thousands of buildings less than 18 metres have been told they will pay 100% of the costs of fixing others’ mistakes. Leaseholders in buildings above 18 metres may still face ruinous costs of fixing non-cladding defects.”

The announcement follows more than three years of uncertainty since the Grenfell Tower disaster that has left thousands of flats unsellable, unmortgageable and uninsurable due to flammable cladding.

Measures include a £3.4bn grant in addition to the existing £1.6bn building safety fund that leaseholders can apply to, which has been widely acknowledged as too small. Loans are expected to be offered for shorter buildings.

Sticking plaster

The LKP spokesman says the government’s solution is a sticking plaster that doesn’t cover all of the related fire safety defects, such as flammable insulation and missing fire breaks.

He adds: “The real culprits, the developers, are being let off paying anything. They get to keep all £30 billion they stand to gain from the taxpayer under the Help To Buy scheme.”

Around 274,000 flats are estimated to have dangerous cladding, according to the Association of Residential Managing Agents, although that figure is likely to reach into the millions when those living in lower rise structures where problems have also emerged are taken into account.

The extra government spend is to be funded partly through a tax on home builders, who will have to pay an additional levy when developing high-rise towers in the future, Jenrick has revealed, and an additional general tax on all large property developers kicking off next year.

Cladding scandal

Paul Afshar, campaigner for End Our Cladding Scandal (pictured): “The Government promised us no leaseholder would have to pay to make their homes safe. Today we feel betrayed. We were hoping for a solution to stop the sleepless nights and for millions living in buildings less than 18m there has been none.  Robert Jenrick needs to get a grip on the cladding crisis.

“Loans longer than mortgage terms for millions and not even enough to cover the cost of making the buildings that the government consider most high risk safe. Taxpayers and leaseholders are left to foot the bill for billions of pounds while the largest developers – who have made over £10 billion in profit since the Grenfell fire – are let off lightly. 

“Many people living in buildings under 18m will still have to bear the cost – for many above £30,000 – saddled with debt around their necks for thirty years. 

Where is the money for missing fire breaks, alarms or for cladding on buildings under 18m? Leaseholders are the victims of this crisis and have done nothing wrong to deserve this.”

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