Government action must go further to prevent remedial cladding costs being passed to leaseholders
What was envisioned as a first step onto the property ladder for many people has turned into a never-ending nightmare, writes Royston Smith MP. | PA Images
It is not fair to ask leaseholders to keep pouring their money into a bottomless pit for being sold unsafe homes. The McPartland-Smith amendments to the Fire Safety Bill will bring an end to this nightmare.
The government’s announcement of an additional £3.5 billion for leaseholders in buildings above 18 metres or six storeys in height, on top of the £1.5 billion Fire Safety Fund announced last year, was encouraging news and a step in the right direction. It shows the government has listened to worried homeowners' concerns up and down the country, and the announcement will have come as a relief to many.
However, homes under 18 metres in height or between four and six storeys tall, do not qualify for this new funding. This affects about half of all buildings affected by unsafe cladding. It includes developments such as conversions from office blocks and low-rise blocks with wooden balconies and flammable insulation. The Secretary of State acknowledges that for leaseholders of buildings below 18 metres in height, ‘the risks are significantly lower and the remediation of cladding is less likely to be needed; in many cases, it will not be needed at all, but where it is, costs can still be significant for leaseholders’. Homeowners that fall into this category will qualify for a long-term low-interest loan capped at £50 a month to pay for the costs to remove dangerous cladding.
£50 per month is too much to demand from leaseholders of homes with unsafe cladding. It will be £50 per month, almost in perpetuity with interest, until the debt caused by remediation costs are paid off. It is an additional £50 per month on top of increased insurance premiums and interim fire safety measures including, expensive night watch, sprinkler systems and fire safety surveys. How is it fair to expect them to keep pouring their money into a bottomless pit for being sold homes not safe to live in?
Many of these leaseholders are already in debt. They must sacrifice working hard for years to pay off these debts due to the poor decisions of successive governments and housing developers, so that they can keep their Help to Buy or shared ownership homes. What was envisioned as a first step onto the property ladder for many people has turned into a never-ending nightmare that will affect people’s lives and our society for years to come if unresolved.
Government must regain the trust of leaseholders who find themselves entangled in the cladding crisis
The government has failed to appreciate the loss in the value of people’s homes that has already occurred. Leaseholders find it almost impossible to sell their homes even if they acquire the EWS1 form necessary for the potential buyers’ mortgage approval. After all, who wants to buy a home cladded with combustible material, with a potentially unlimited bill to pay? Hundreds of thousands of homes continue to depreciate in value while they have the potential to recover if the unsafe cladding and other fire safety defects are remediated.
The Secretary of State says that beyond Covid the government wants to build back better—better homes, better infrastructure, and better communities. To do so, the government must regain the trust of leaseholders who find themselves entangled in the cladding crisis. The cladding crisis should never have happened. The longer it takes for a complete solution, the more unnecessary suffering is being inflicted on leaseholders.
The McPartland-Smith amendments to the Fire Safety Bill will bring an end to this nightmare for leaseholders. The amendments, if passed, will prevent remedial cladding costs due to historic building defects from being passed onto leaseholders.
The government has a chance to right the wrongs caused by decades of bad policies while kick-starting the post-Covid economy by reactivating the values of hundreds of thousands of properties that are often people’s first homes and creating the desirable ripple effect for properties up the chain.
Royston Smith is the Conservative MP for Southampton Itchen.