Cladding Crisis- Government announces 3.5bn fund

The government has announced that it will pay for the removal of unsafe cladding for all leaseholders in high-rise buildings, providing reassurance and protecting them from costs under it’s new five-point plan ..

With an unprecedented £5 billion investment in building safety, including the newly proposed £3.5 billion announced last week, the Housing Secretary, Robert Jenrick has confirmed that the government will fully fund the cost of replacing unsafe cladding for all leaseholders in residential buildings 18 metres (6 storeys) and over in England.

This will ensure funding is targeted at the highest risk buildings in line with longstanding 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, with 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. This will pay for cladding removal – where it is needed – through a long-term, low interest, government-backed financing arrangement.

Under the scheme, no leaseholder will ever pay more than £50 a month towards the removal of unsafe cladding. This will provide reassurance and security to leaseholders, and mortgage providers can be confident that where cladding removal is needed, properties will be worth lending against.

In addition, a new tax will be introduced for the UK residential property development sector. This will help to raise at least £2 billion over a decade to help 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.

Whilst the news has been welcomed by some the Labour Party pointed out that the “arbitrary” height limit could result in financial ruin for those living in lower blocks, who would be expected to take out loans to make their homes safe, plus the new scheme did not take into account other fire safety problems not related to cladding that had emerged after the Grenfell Tower disaster.

According to the Association of Residential Managing Agents it is estimated that there are approximately 650,00 people are living in buildings with flammable exterior cladding with many of these homes unsaleable. A recent survey by campaign group UK Cladding Action group found that nine out of 10 owners have reported worsening mental health as a result of worries about their safety, and about the significant financial pressures which they face.

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