Cladding climb-down in the offing?

Cladding climb-down in the offing?

Back in May last year, we explained how ordinary leaseholders living in buildings between 11-18-metres high were stuck in limbo after the Grenfell tragedy. Although flammable cladding was being removed from buildings over 18 metres, the money to strip it from slightly shorter buildings couldn’t be found; therefore leaseholders were having to cough up themselves.

This all seemed incredibly unfair. It wasn’t the leaseholders’ fault that developers had fitted exteriors with inappropriate materials. So why should they have to shell out tens of thousands of pounds to make themselves safe?

The problem, of course, is that nobody else wanted to pay either. Developers put their fingers in their ears and MPs rejected attempts to cover leaseholders for up to £100,000 several times. Leaseholders were therefore up the creek without a paddle – or rather, up a tower block with no way of removing life-threatening tinder. They were, in effect, stuck. They couldn’t even sell up and move because banks, quite understandably, didn’t want to lend on homes that represented a fire risk. 

Hope on the horizon?

Thus far, all the government has done to help trapped leaseholders is a loan scheme that limits repayments to £50 per month. This is a drop in the ocean compared to spiralling insurance costs, rising service charges, and sky-high fees for so-called ‘waking watch’ patrols. But now, at long last, the government has promised that leaseholders will no longer shoulder the burden.

So who’s in the government’s sights now? It’s those pesky developers – many of whom have made large profits since Grenfell due to house price rises. Therefore, they should, in theory, be able to pick up the estimated £15bn tab quite comfortably. 

What’s more, despite earlier rumours that leaseholders would only be covered for the removal of flammable cladding – meaning they could still face bills for defective fire compartmentation and fire doors – new housing secretary Michael Gove is insisting that developers should pay for the lot. And they won’t even get any help from the government. Gove doesn’t think the taxpayer should be on the hook, either. 

The Tories are also threatening punitive action if the developers don’t pay up. This would be through new tax laws, pursuing them through the courts, or restricting their access to funding. He’s therefore certainly talking the talk; the big question now is whether he walks the walk. 

Potential hurdles

Although Michael Gove is making all the right noises, taxing developers and taking legal action against them hasn’t exactly worked brilliantly in the past. Cynics have also pointed out that big developers (or rather those that own them) often donate to the Conservative Party. Will the government therefore really bite the hand that feeds them? £1.3 billion has already been wiped off the stock market valuations of the UK’s largest homebuilders. And this won’t have gone unnoticed. 

We should also mention, of course, that developers weren’t the only ones responsible for the Grenfell tragedy. Although they’re public enemy number one in many people’s eyes, lax regulatory standards were also to blame. Furthermore, Taylor Wimpey, a big developer that’s already funding remedial work, has rightly pointed out that others in the supply chain must take responsibility, too.   

Consequently, we’re not sure whether targeting developers alone will have the necessary impact. Some government funding will probably be needed to get urgent remediation across the line. This will buy time for Gove’s gang to pursue those companies who won’t willingly contribute. 

A step in the right direction

Although leaseholders will be waiting anxiously to see if words translate into meaningful action, the government’s change in tone is definitely encouraging. Whereas previously, housing secretary Robert Jenrick never got particularly animated, Gove’s approach seems very no-nonsense: “Those who knowingly put lives at risk should be held to account for their crimes”, he said this week. 

What’s more, Gove certainly has a few levers when it comes to following through on his promises. For example, he could threaten to increase the 4% tax on developers’ profits. There’s even the chance that developers might be swayed by public opinion alone; many people are still angry about Grenfell so paying up pronto might be the smart thing to do from a PR point of view. 

Overall, we just hope that justice is done soon. Grenfell was an awful tragedy, and it’s upsetting that so many other people have been caught up in the fallout. Let’s hope that affected leaseholders can finally move on and enjoy a new lease of life. 

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