MSE News

Extra £3.5bn fund promised to fix unsafe high-rise cladding - here's what it means

Polythene wrapped burnt husk of the Grenfell tower one year after the deadly fire

A package of measures has today been announced by the Government in a bid to help flat-owners in England who've struggled to foot the bill to fix unsafe cladding on their high rise blocks in the wake of the Grenfell Tower tragedy. 

In an announcement made this afternoon, housing secretary Robert Jenrick told the House of Commons that the Government would provide an additional £3.5 billion to remove unsafe cladding from high and medium-rise buildings in England while imposing a levy on developers building certain new high-rise blocks.

Here's a round-up of what's been confirmed: 

  • New pot to fund the removal of unsafe high-rise cladding. The Government is to make funding available to pay for the removal and replacement of unsafe cladding for all leaseholders in buildings of 18-metres and above – or above six storeys. The Government says further detail on how this will work in practice and how people can apply will be released in due course.

  • Low-interest loans to be offered to help cover cladding costs on smaller blocks. Mr Jenrick said that under a "long-term low-interest scheme, no leaseholder will ever pay more than £50 a month towards the removal of unsafe cladding". This applies to buildings of between four and six storeys. The Government says further detail on how this loan scheme will work and how people can apply will be released in due course.

  • New tax on property builders to be introduced to help fund cladding-related costs. The Government will consult on the design of this policy - which it believes will raise at least £2 billion a decade - “in due course” with a view to it being introduced in 2022. The Government stresses that taxpayers shouldn't be solely responsible for footing costs. 

Heightened awareness of 'cladding crisis' since 2017

Mr Jenrick's announcement comes amid growing criticism of the Government’s response to the so-called 'cladding crisis'. The issue was sparked in the wake of the 2017 Grenfell Tower fire, which killed 72 people.

The fire was sparked by a fault in a fridge-freezer in one flat but the cladding and insulation were cited as the cause for the rapid progression of the blaze, which quickly spread to several floors of the west London tower block. 

As a result of the fire, new rules were put in place by the Government to prevent such a tragedy from happening again. Combustible materials were banned in the external walls of high rise residential buildings of 18 metres and over, and following a review into its effectiveness, the Government is also separately consulting on extending the ban further, to lower the 18 metres height threshold to 11 metres.

People have been unable to sell or remortgage their homes

But the problem with removing and replacing this type of cladding on existing buildings is that it can be a costly process, with building owners - known as freeholders - sometimes passing these costs onto leaseholders.  Mr Jenrick today admitted these costs can be "significant" and that they risk "punishing those who have worked hard to buy their own home".  

The House of Commons has previously heard how huge numbers of people, especially leaseholders, are “stuck in the middle” and living in “unsafe homes” which they cannot sell, but are being asked to “foot the bill” for remediation works. Some homeowners have found that as well as being unable to afford bills, they've also been unable sell their properties or remortgage because their homes have been valued at extremely low levels.

Existing help provided by the 'Building Safety Fund' 

For leaseholders currently struggling to pay for cladding costs, the Government has an existing £1 billion 'Building Safety Fund', which was unveiled last May. This is for buildings without the worst type of cladding known as aluminium composite material (ACM). A separate £200 million fund was set-up in 2019 for buildings with ACM cladding. 

But crucially, the Building Safety Fund only issues grants to building owners rather than to leaseholders directly. The idea being that if building owners have funding, they won't need to pass on costs to leaseholders. You can find out more info on the scheme on Gov.uk, but you need to have already registered by now in order to apply for one of the grants.

Building owners can also apply for something called an EWS1 certificate, which was introduced after the Grenfell disaster, to confirm the cladding on their building is safe. Many mortgage lenders now require one of these in order to lend on flats in buildings which exceed 18 metres in height. Those in buildings without cladding no longer need an EWS1 form though, after changes made by the Government last year.  

This is a complicated area but there are various organisations and charities that can provide information for those affected by cladding issues. The Leasehold Knowledge Partnership, for example, is a registered charity and secretariat of the All Party Parliamentary Group on leasehold and commonhold reform. It has a specific cladding information page on its website. 

Additional reporting from the Press Association. 

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