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Homebuilders ‘pledge’ to fix unsafe tall buildings

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Written by: Emma Lunn
13/04/2022
The government has reached an agreement with major housing developers to fund building safety repairs, meaning some will need to repay money already paid by taxpayers.

The agreement will see the homebuilding industry contribute £5bn to address the building safety scandal which came to light after the Grenfell Tower fire.

In what levelling up secretary Michael Gove described as “a victory for leaseholders”, the government has agreed a solution with the housing industry that will see developers commit a minimum of £2bn to fix their own buildings.

The industry will also pay up to a further £3bn through an expansion to the Building Safety Levy.

Under the new agreement, which will become legally enforceable, more than 35 of the UK’s biggest homebuilders have pledged to fix all buildings 11 metres tall or higher that they have played a role in developing in the past 30 years.

For the companies yet to make the pledge, Gove 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 that will be chargeable on all new residential buildings in England. This is expected to raise up to an additional estimated £3bn over 10 years from developers and ensure no leaseholder in medium-rise buildings faces crippling bills, even when their developer cannot be traced.

New proposed laws, announced in February under the Building Safety Bill, will ensure qualifying leaseholders are protected from the costs of historical building safety defects, including total protection against cladding costs.

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.”

The pledge published by government commits developers who have signed up to legally binding contracts.

The detailed agreement confirms developers will act “as quickly as possible” to fix buildings, implement new proportionate guidance on building safety, and regularly report to leaseholders and government on their progress

Developers have also been told to “respect an independent dispute resolution process established by government” and refund money already received from the taxpayer to fix their buildings.

The government is also introducing new powers that could be enforced on a developer should they breach the agreement, as well as on any remaining companies who fail to sign up.

These new powers would allow the secretary of state to block those who refuse to sign from building and selling new homes.

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