Sat. Jan 22nd, 2022


Developers will be asked by ministers next week to pay up to £ 4 billion to cover the cost of removing hazardous cladding from tens of thousands of buildings, with the threat of legal coercion if they refuse.

Michael Gove, the minister in charge of housing, was told by the Treasury that there would be no additional state cash to remove upholstery from lower-rise buildings and that developers would have to pay.

Gove, who will make a statement on the issue next week, refuses to get the cash within his departmental budget.

“If the industry does not come up with a solution, we will impose it on the law,” said one Gove ally.

Concerns about the safety of building upholstery were caused by the Grenfell tower fire in 2017 in which 72 people died.

Initially, high-rise tower blocks clad in materials similar to Grenfell were the subject of investigation, but the scale of the crisis widened in January 2020 when ministers said multi-storey, multi-dwelling residential buildings of any height should be assessed for fire risk.

It dragged in more than 800,000 additional flats across the UK, hitting tenants who had to take out personal loans to cover work on buildings between 11m and 18.5m high.

The government has set aside £ 5 billion to fund the removal of cladding for taller buildings – £ 2 billion of which will be raised through a developer levy. It now wants developers to pay rather than tenants to strip the material from lower buildings as well.

Fighters for upholstery have long demanded that the government both accept the principle that buildings under 18.5 m should be covered and that tenants should not have to pay.

The BBC’s Newsnight, which reported the story for the first time, said that Gove, Minister for Gender Equality, would “inform” the construction sector when he made a statement to the Commons next week.

It said that Simon Clarke, the general secretary of the treasury, had told Gove that no new treasury funding would be available for the work, that the total cost of extra upholstery removal should not exceed £ 4 billion and that the provision will cover only upholstery, not others. fire safety defects.

Developers opposed paying the bill, arguing that most of the buildings affected were furnished according to the government regulations in force at the time.

“The profit of developers has been strong over a long, long period, so we are an easy target. The government does not go after the upholstery companies or the contractors. Our industry does not pretend that there is no debt, but it is not the only one responsible, ”says Matthew Pratt, CEO of Redrow.

A Gove colleague said: “We do not pretend that this is the final answer to the crisis, but it is an important step. We will be guided by three principles – the polluter must pay, tenants must be protected and common sense and proportionality must be restored. ”

Parliament’s housing committee has estimated that repairing the clothing crisis could cost as much as £ 15 billion.

The FT reported in November that the Bank of England was concerned about the impact of the clothing crisis on financial stability and has put borrowers under pressure to audit their exposure to homes that may be unsaleable.

The Prudential Regulation Authority, the BoE body responsible for supervising banks, believes the government has not understood the extent of the clothing crisis and expects the costs to mortgage lenders to be higher than those set out so far, the people said. said.

Property owners with potentially unsafe upholstery are currently faced with large bills, either to correct defects or to maintain temporary fire safety measures such as 24-hour patrols.

Until that work is fully calculated or completed, appraisers cannot determine the value of a property, which prevents borrowers from issuing mortgages on those homes.

The Department of Equality declined to comment.



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