New measures announced for high-rise buildings

England and Wales

The Housing Secretary, Robert Jenrick, has this afternoon announced a number of further measures in relation to the remediation of unsafe cladding in high-rise residential buildings. The government’s ‘5-point plan’ includes:

  1. providing a further £3.5billion to the Building Safety Fund (taking the total to over £5billion) to fund the costs of remediating unsafe non-ACM cladding for high-rise buildings (i.e. those over 18m or six storeys);

  2. the introduction of a long term, low interest government backed financing scheme for the remediation of cladding on lower-rise buildings (i.e. those of 11-18m or 4-6 storeys) which will pay for cladding removal, where it is needed. The intention is that leaseholders residing in lower-rise buildings will never pay more than £50 a month for cladding removal;

  3. the introduction of an industry levy and tax. The proposed levy will be targeted and will apply when developers seek permission to develop certain high-rise buildings in England via "Gateway 2". The new tax for the UK residential property sector will be introduced in 2022 and according to the government will raise £2billion over a decade to help pay for cladding remediation costs. Further clarity on the specific details of this new tax may come in the budget announcement on 3 March – we will have to wait and see;

  4. a world-class new safety regime will be developed to ensure a tragedy like Grenfell never happens again. The government has already made progress on this with the introduction of the Building Safety Bill and the inception of the Building Safety Regulator;

  5. a pledge to provide confidence to this part of the housing market including lenders and surveyors.

Additionally, legislation will be brought forward this year to tighten the regulation of building safety and to review the construction products regime to prevent malpractice arising again.

There is a clear expectation from the government that building owners and developers should ‘step up’ to meet the costs of the removal and replacement of unsafe cladding on high-rise buildings except where they are unable to do so (or no longer exist). The government’s view is that passing the costs onto leaseholders risks punishing them when they have found themselves living in an unsafe building through no fault of their own.

However, the removal and replacement of cladding is not the only fire safety issue for many buildings and the significant costs involved in remedying these other issues appear to remain firmly with leaseholders for the time being.

If you require specific advice on Fire Safety and Building Safety please speak to Lukas Rootman and Kaleem Mahmood. For further advice on the Real Estate implications of these measures please speak to Eleanor Murray and Sarah Pope.