Today, the UK Government announced an additional £3.5bn to be added to the existing £1.6bn fund for the removal and replacement of combustible cladding on buildings over 18 metres in England. This announcement is expected to bring relief to thousands of flat owners across the country who have been calling out for help.
Rt Hon Robert Jenrick MP in an announcement in the House of Commons today expressed his intention to ensure the safety and fair treatment of homeowners and leaseholders in managing the removal of ACM cladding. Further, he expressed frustration at the failings of the past to prevent the crisis.
Minister Jenrick announced a multi-pronged approach to ensuring the cladding is removed while ensuring leaseholders face no, or low costs. The primary focus is around high-rise buildings which pose the greatest risk in the event of a fire. Jenrick declared an additional £3.5bn to be added to the existing fund to cover the replacement of all ACM cladding over 18 metres, to be used when the building owner or developer no longer exists or has failed to carry out the work. The Minister for Housing stated that they aim to take the pressure off leaseholders and prevent costs being passed from building owners to residents.
For lower and medium rise buildings the Minister advised that the risk in the event of a fire is “significantly lower” and the need for remediation is often not needed. In the case that replacement is required, Jenrick announced a fund for low interest loans to continue for “many years” to reduce the financial strain.
To cover the cost of the fund, totalling over £5bn, Jenrick announced plans to implement a new levy and tax on the construction industry to encourage developers to take “collective responsibility”. The new tax set to come into effect in 2022 is intended to work on a sliding scale to ensure those with the highest profits pay the most into the fund.
The Grenfell Tower fire in 2017 shocked the nation and spurred the government to implement a ban on combustible materials on the exterior of new buildings over 18 metres and ordered the removal of combustible materials on existing buildings. More than three and a half years have passed, and an estimated 700,000 people remain living in high-rise buildings with combustible cladding.
While the ban may improve fire safety on new high-rise buildings, it has left many flat owners stuck between the heavy cost of replacement and the plummeting value of their properties. In the meantime, the cost of insurance for these properties has skyrocketed.
According to data released by the MHCLG in December cladding replacement has been carried out on 30% of private buildings and 58% of social housing. The opposition has branded the situation ‘shameful’ adding to mounting pressure on the government to intervene.
Rt Hon Robert Jenrick stated today that the risk of death from fire in a high-rise building is “very low” and that while the tragedy of Grenfell demands action, the government intends to approach it in a “proportionate way” across all initiatives.
The news comes as a welcome relief to many high-rise flat owners who keenly wait to feel its effects.