Michael Gove is seeking to dramatically widen a proposed cladding compensation scheme to encompass other defects on homes built in the past 30 years as he steps up action against major developers.

The Levelling Up Secretary has threatened in meetings with activists and the industry to force housebuilders to fix any significant breaches of building regulations on properties up to three decades old, sources said.

The proposal goes significantly further than a current threat to force developers to spend billions of pounds on the removal of unsafe cladding from buildings between 11 and 18 metres tall.

The Government has already announced plans to introduce amendments to the Building Safety Bill which would give building owners and leaseholders a legal right to demand compensation from their developer for safety defects up to 30 years old. 

However, this only covers problems so severe that they leave the house uninhabitable. Mr Gove is considering plans to widen the definition of what constitutes a defect to include more minor breaches of regulations – a change that industry figures claim would quadruple their costs. 

Housebuilders have attempted to push back against any widening of the definition. An industry source said: “As it stands, we don’t expect the cost of replacing the cladding-related issues not already covered by developers to reach the £4bn costs touted by the Government. 

“However, if more general improvement works are included, it will”. 

Developers have raised concerns regarding “mission creep” with civil servants, according to Whitehall sources. The House Builders Federation wrote to Mr Gove this week to warn him against the move. 

It said: “Through the process of investigating older buildings, it has been considered that on some occasions, building owners or managing agents have identified items for improvement which do not affect the building’s safety. 

“In this respect and given the importance for many thousands of leaseholders in genuinely affected blocks, we would encourage government to engage with other stakeholders to ensure we remain focused on safety issues rather than general betterment or enhancements to older buildings.” 

A Government source said that while it believe developers should have to pay for wear and tear on buildings, leaseholders should not be required to foot the bill for to mistakes made during construction. 

The source said: “A common sense and proportionate approach is needed. Safety is the Government’s focus, but ultimately it is not for leaseholders to pay for necessary work”.  

Mr Gove has made resolving the cladding crisis a priority since he took over responsibility for housing. Around 274,000 properties were found to contain unsafe building materials in the wake of the Grenfell fire. 

Earlier this year, Mr Gove announced a £4bn fund to remediate cladding issues in buildings between 11 and 18 metres tall, replacing a loan scheme which trapped many leaseholders in unsafe buildings. 

Negotiations are ongoing between developers and the Government on how to pay for the works, with further potential tax rises on housebuilders mooted.