Four months on from our last update on the Cladding Scandal, we have finally seen the Government take a firmer stance on the cladding issue facing leaseholders in low to mid-rise properties. Earlier this month, Michael Gove, secretary of state for Levelling Up, Housing and Communities, announced that the developers of properties affected by unsafe fire measures should pay for the replacement of the cladding, not the leaseholders.
With the cost of replacing unsafe cladding running into tens of thousands of pounds per leaseholder, many have been unable to either sell their flat or afford to get the necessary work done. Rather than offer loans to leaseholders to cover the costs of the building work, as was previously planned, the Mr. Gove’s department are now seeking to secure funds from the developers.
Shared responsibility
Getting the estimated £4bn needed to fix the defective buildings may be easier said than done. The property development process inevitably involves a range of professionals and manufacturers. Developers may well argue that the responsibility does not lie solely with them, but also with those who specified, certified and supplied the materials that were used during construction, which have now turned out to be defective.
An additional concern is that there are cases where it might be difficult to track the developer down to enforce payment. While there are many highly reputable developers, the industry is unfortunately also known for having its share of black sheep.
A glimmer of hope for leaseholders?
Despite the challenges that will still be faced by Mr. Gove and the Department for Levelling up, Housing and Communities in getting the funds, this change in tone has been well received by many.
Leaseholders will continue to face some uncertainty however as the timings have not yet been confirmed, but they have been given a glimmer of hope that they will at least not be expected to pay large sums to have any historic fire safety issues fixed, including but not limited to the replacement of unsafe cladding.
What Mr. Gove has not been able to guarantee yet though is whether leaseholders who have already made payments towards the replacement of unsafe cladding will receive compensation This may leave many out of pocket.
In our expert estimation, the government will probably ultimately end up paying for the necessary work to be done. Most leaseholders cannot afford to pay for it and it is unlikely that the majority of developers will be willing to pay billions of pounds to rectify cladding issues.
We hope we are wrong and commend those developers who are seeking to work with the government to provide safe homes. In the meantime, we wait to see how the rest of the property development industry responds to these proposed measures.
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