The Intermediary Mortgage Lenders Association (IMLA) has welcomed Housing Secretary Michael Gove’s stance on cladding which will see developers asked to shoulder the cost of removing it from buildings over 11m tall.
Additionally, leaseholders living in buildings between 11 and 18 metres high in England will no longer need to pay the £50-a-month proposed loan proposed late last year.
Gove told the House of Commons: “We will scrap the proposal for loans and long-term debt for medium-rise leaseholders.
“I can confirm today to the House that no leaseholder living in a building above 11 metres will ever face any costs of fixing dangerous cladding.”
In a much-trailed speech Gove told developers that they need to agree to start contributing this year to cover the “full outstanding cost”, which is estimated at £4bn.
He told MPs he will hold talks with firms in the coming weeks and has threatened to introduce a developers’ tax, including on those responsible for dangerous cladding, if there is no voluntary action to fix the problems.
Kate Davies, executive director, IMLA, said: “Today’s announcement on the cladding crisis will be welcomed by beleaguered leaseholders, but there are still points that need urgent clarification for both renters and developers.
“Mr Gove’s mention of ‘commercial consequences’ and the statement that leaseholders will be able to sue builders for up to 30 years, provide punchy headlines but few specific details.
“The question of enforcement is one that will loom over the sector, as taking builders to court will require time, money and courage from already-exhausted leaseholders and, if undertaken by the Government, gives little relief to leaseholders in the interim.”
“The statement that the Government will seek a ‘solution in law’ for slow-moving developers is promising, but also suggests further delays and a timescale that is of little reassurance to leaseholders here and now. Withdrawal of the consolidated advice note is also welcome but, again, we have questions around how long it will take the BSI to draw up the promised new proportionate guidance.”
“Even where the Government provides a timeframe, this vagueness persists. Developers have been given two months to create a plan for resolving the growing cladding costs crisis but, without a sense of the time required for the Government Apex taskforce to identify and contact recalcitrant developers, leaseholders have been given little more of a promise than ‘trust us and wait.’”
“Today’s news also avoids discussing the other non-cladding issues and building defects that have been uncovered whilst cladding has been reviewed across the UK. Many freeholders and management companies are passing these costs onto leaseholders, and we need to see a proposed solution that encompasses all these problems in addition to addressing the primary concern of cladding.”
“In July 2019 the House of Commons Committee on Housing, Communities and Local Government published an excoriating report into Leasehold reform which called for numerous measures to be taken to protect leaseholders. The Government has responded positively to some of the recommendations, but new legislation will be required to give effect to many others. And as we know, legislation takes time…”
