Cladding Climbdown – what do these changes mean?

Since Grenfell Tower, over 4 years ago, there has been a large amount of stress and uncertainty for flat owners across the country. The government had previously outlined action to remove and replace unsafe cladding from residential buildings, which greatly affected the pockets of the flat owners, in low rise flats especially. This was due to the government offering loans to leaseholders in buildings below 18 metres but those owning properties in buildings above 18 metres or six storeys, had funding from the government.

In a new U-Turn, Michael Gove, the Housing Secretary, has announced that “leaseholders in buildings 11 to 18 metres in height, will no longer have to contribute to replacing cladding”. The government’s proposed plan will be to make property developers pay the estimated £4bn cost. It has been reported that Gove “may use a high level “threat” of tax or legal solutions in discussions with developers as a means to obtaining voluntary contributions from them” and in the last 24 hours, he has reportedly threatened a trading ban on cladding firms unless they pay for repairs. This has of course caused uproar from property developers with executives from 20 of the largest property developing companies pushing back against this.

For leaseholders in buildings 11 to 18 metres, the confirmation of grants has been very welcomed but also cautiously. The treasury letter states that the approval for funding only applies to fixing cladding which means that leaseholders may still face bills for other fire safety areas such as fire doors. There is also the uncertainty of whether mortgage companies will start to lend against their homes to make them sellable. Other professionals have also made comments on timescales and how fast the cladding issues will be able to be rectified. Many flat owners, who were eligible for government grants from the previous proposal in 2020, are still awaiting funding.

Although from the outside it can be seen as a positive step for the cladding crisis, many important details have not yet been outlined to how beneficial this will be for the leaseholders. Matthew Pennycook, Labour’s Shadow Housing Minister has said “Any new measures that help resolve the building safety crisis are welcome but on the face of it these appear far less significant than they sound. Nothing on non-cladding defects, no new developer levy and the position on leaseholder liability unchanged. We await further detail.”

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