Major Housing Developers Agree to £5bn for Building Repairs

HALF OF HOUSING DEVELOPERS have agreed with government to contribute £5 billion for building safety repairs to the homes they built.

Levelling Up Secretary Michael Gove has agreed with the housing industry that developers commit a minimum of £2 billion to fix their own buildings. Industry will also pay up to a further £3 billion through an expansion to the Building Safety Levy.

Under the new agreement, which will become legally enforceable, 35 major homebuilders have signed a pledge to fix all buildings 11 metres+ that they have played a role in developing in the last 30 years.

Consequences for Housing Developers

For the companies yet to make the pledge, the Secretary of State has also confirmed there is little time left for them to sign up, and that those who continue to refuse will face consequences if they fail to do so.

As set out in January, a new government scheme will also see industry pay to fix buildings where those responsible cannot be identified or forced to in law. This follows previous confirmation that plans for a 30-year loan scheme paid for by leaseholders would be scrapped.

The new scheme will be funded through an extension to the Building Safety Levy (set out in clause 57 in the Building Safety Bill) that will be chargeable on all new residential buildings in England. This is expected to raise up to an additional estimated £3 billion over 10 years from developers and ensure leaseholders don’t pay repair bills, even when the developer cannot be traced.

As part of the Building Safety Bill, qualifying leaseholders are protected from the costs of historical building safety defects, including cladding replacement.

Levelling Up Secretary Michael Gove said: “Today marks a significant step towards protecting innocent leaseholders and ensuring those responsible pay to solve the crisis they helped to cause.

“I welcome the move by many of the largest developers to do the right thing. But this is just the beginning. We will do whatever it takes to hold industry to account, and under our new measures there will be nowhere to hide.”

Housing Developers Pledge

The pledge published today commits developers who have signed up to it to legally binding contracts, and to implement their promises as soon as possible.

The detailed agreement confirms developers will:

• Act as quickly as possible to fix buildings
• Implement new proportionate guidance on building safety
• Regularly report to leaseholders and government on their progress
• Respect an independent dispute resolution process established by government; and
• Refund money already received from the taxpayer to fix their buildings.

Enforcement

Plans to enforce the agreement in law will be released in due course, the government says and will apply to developers which breach the agreement, as well as on any remaining companies which fail to sign up. The new powers would allow government to block companies which refuse to sign from building and selling new homes.

Cladding and insulation manufacturers are yet to come forward with a proposal to contribute to the costs of remediation. The Secretary of State has warned the Construction Products Association he will do whatever it takes to hold cladding and insulation manufacturers to account.

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