11 February, 2021
The government has revealed that it is investing an extra £3.5billion in addition to the £1.6billion already pledged towards the removal of unsafe cladding in high-rise buildings which are taller than 18 metres. This will mean that leaseholders in such buildings will not be charged "for cladding remediation works".
Conversely, those buildings with a height of less than the 18-metre requirement will have access to long term lower interest rate loans to address the cladding issues. It is understood that the loans will be spread over a number of years with capped payments up to £50 per month.
In addition to the extra investment, the government has announced a levy aimed at developers who seek permission to build high-rise blocks in the future. An additional tax for the residential property sector will also be introduced from 2022. It is envisaged that the funds generated will be used to fix historic fire safety defects.
In its effort to kickstart the housing market, banks and building societies will be urged by the government to support the Royal Institution of Chartered Surveyors' (RICS) proposals to reduce the number of buildings that require an External Wall System safety inspection which is currently needed to secure a mortgage.
Despite the extra investment, leaseholder groups are concerned that the measures do not go far enough particularly for those leaseholders who live in high-rise buildings below the 18-metre benchmark.
Whilst this is not set in stone yet, the consensus in the Sector is that social landlords will be able to access the scheme in the way it does for the existing £1billion Building Safety Fund.
In other words, social landlords will be able to receive government funding to cover the amount it would have otherwise billed to their leaseholders or if it is faced with a viability challenge as a result of the crisis.
Once further information and/or guidance is published on the workings of the scheme, a further update will be published. In the meantime, however, should you have any queries please do get in touch and we would be happy to help with any preliminary queries on this matter.
For more information contact Jennifer Hankinson in our Housing & Regeneration department via email or phone on 01254222417 or Andrea James on 01772 220206 or firstname.lastname@example.org. Alternatively send any question through to Forbes Solicitors via our online Contact Form.
Learn more about our Housing & Regeneration department here