Government Falls Short of Cladding Reform Pledges, Says More Work Needed

Michael Gove may have been very honest when he said that forcing leaseholders to pay for unsafe buildings was ‘morally wrong.’ But despite the best intentions, things have changed little. This has forced campaigners for safe buildings and homes to question the Secretary of State for Levelling Up, Housing, and Communities about how much has changed over the past year since he made that statement.

With lenders hesitant to finance flats and buildings with unsafe cladding, many flat owners cannot sell their property. The government tried to address the problem by introducing the Building Safety Act. The Act got the Royal Assent in April 2022. It stated that the developers had to pay first for any repairs, followed by the landlord or the owners. Leaseholders must share the costs only if the owners cannot cover the full costs of remediation of their building.

he Royal Institution of Chartered Surveyors (RICS)

Meanwhile, UK Finance, The Royal Institution of Chartered Surveyors (RICS), and the Building Societies Association (BSA) have issued a joint statement that six lenders will finance properties that have safety issues. Top mortgage lenders Barclays, HSBC, Lloyds Banking Group, Nationwide, NatWest, and Santander have also issued statements confirming that they will lend on buildings in England above 11m in height, subject to certain conditions.

• · The buildings must be remediated by the developers that built them or
• · The building must be on a government-funded remediation scheme or
• · The leaseholder protections must cover them in the Building Safety Act.

Responding to the campaigners' demand for clarity on the building safety issue and the steps taken so far, the Department for Levelling Up, Housing and Communities has issued a statement on the social channel Twitter. “Progress has been made to protect people affected by building safety issues in the past 12 months, but more must be done. We are determined to make sure buildings are fixed, leaseholders get a fair deal, and the industry does the right thing in 2023.”

The Law Commission

Campaigners say it is unfair to exclude homeowners in building under 11m with ACM cladding. They are forced to pay more expensive mortgages and have little hope of re-mortgaging or selling on terms favourable to them. The Law Commission had proposed making purchase processes and leasehold extensions fairer and more transparent. British MPs recently pointed out to Housing Minister Lucy Frazer in Parliament that, despite the Law Commission proposal, there is still no protection for existing leaseholders.

The Housing Minister has assured of bringing forward legislation in the Parliament to make valuations easier for leaseholders extending their leases. The legislation will also ensure that the lease extension experience is easier and cheaper. It will allow freeholders to take control of the management of their buildings. They will also get the right to manage many other critical measures.