What the Government’s cladding reforms means for flat owners

On the face of it, this is a huge win for flat owners in mid-rise blocks who now do not need such a form to sell or remortgage.

Flat owners in blocks of all heights also face having to fix other fire safety defects such as combustible insulation, wooden balconies and missing fire breaks. These often only become apparent when cladding remediation work starts on the building.

Mr Gove suggested that these non-cladding costs would also be met, and that statutory protection would be brought in for leaseholders, in theory shielding them from the costs of this work. He added that those who had already paid for cladding works would not be reimbursed.

He told MPs that medium-rise buildings were “safe, unless there was clear evidence to the contrary”. He added: “There must be far greater use of sensible mitigations like sprinklers and fire alarms in place of unnecessary and costly remediation works.”

It is unclear whether lenders and surveyors will now offer mortgages on these properties without an EWS1 form, or lend on properties which originally failed their assessment, especially if they have other, non-cladding defects. Lenders have so far refused to offer mortgages without this form, even if the cladding was removed but other defects remained.

Liam Spender, spokesman for the End Our Cladding Scandal campaign, said: “Solving issues such as the compartmentation of flats, and properties not being properly divided from each other, can be as expensive as the cladding itself.

“In some buildings each flat is facing a bill of £30,000 to £40,000 to fix unsafe cladding and then another £40,000 to remedy compartmentation.”

Who will pay? 

The Government intends to make developers pay the bill, to the tune of £4bn. 

Housebuilders must pay for the remediation of any buildings over 11 metres that they have played a role in developing. The sector as a whole must also come up with a “fully funded plan of action” for the £4bn bill.

All housebuilders with annual profits of £10m and above are expected to be liable for the funding, although the Government is yet to announce a final decision on the scope of contributions. However, it is uncertain how this will work in practice and property developers have historically refused to accept financial responsibility for the building safety crisis. 

Developers of high-rise buildings have already been hit with a levy on profits to raise £2bn for the Government’s cladding remediation pot. It is unclear if tax will be expanded or increased.

There is also concern that even with this extra £4bn – on top of the £5bn pot for buildings over 18 metres – there will still not be enough money to solve the problem. The housing committee has previously estimated it will cost £15bn to fix the crisis, while others have claimed it could be much more due to other non-cladding related defects.

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