Landlords must not be excluded from funding for fire safety works related to the cladding crisis, a cross party group of MPs has urged the Government.
The Levelling Up, Housing and Communities Committee has heavily criticised the Government’s new building safety plans, which are designed to protect trapped leaseholders from spiralling costs, as “a bizarre lucky dip”.
Michael Gove, the Levelling Up Secretary, has shut out anyone with more than two properties from his commitment that no leaseholder should have to pay for the removal of unsafe cladding in the wake of the tragic 2017 Grenfell fire.
A LUHC committee report on Mr Gove’s proposals, published today, said buy-to-let landlords were no more to blame for building defects than any other leaseholders, and could also not afford to pay the bills.
It warned that excluding buy-to-let landlords from statutory protections for leaseholders would stop homes from being made safe.
Stephanie Jameson, who asked not to use her real name, and her husband own three buy-to-let flats in Birmingham. They purchased two of the flats to fund their retirement. They are accidental landlords on the third property, which used to be their home, because cladding problems meant they were unable to sell it. Desperate to move, they let it out to cover the cost of the mortgage.
All three properties have fire safety problems, meaning Mrs Jameson faces a total potential remediation bill of £150,000. Half of the costs are cladding related and half are non-cladding. On one of the flats, the annual service charge bill has already increased more than fivefold, from £3,800 to £20,000.
“We are haemorrhaging money. We’re not millionaire developers, we’re not an overseas pension fund. We’re simple people and if we had been able to sell, we would,” said Mrs Jameson, 55.
“We did what the Government encouraged us to do and tried to make ourselves financially independent in old age. Now, we’re not going to be able to have the retirement that we planned, even though I have worked so hard for 30 years.”
Ben Beadle, of the National Residential Landlords Association, a trade body, said: “The Government’s decision to exclude buy-to-let landlords [who let out] more than one property from its scheme is unfair and unacceptable. Ministers now need to stop dragging their feet on this issue, accept the committee’s conclusions and end its unjust and inexcusable policy.”
Mr Gove has said that the plans to exclude landlords with more than two properties were because the Government did not want to subsidise “people who were of significant means”. He had previously said he would not rule out protecting landlords who had invested in properties as their pensions.
The committee report said it had heard from landlords excluded from the protections who had invested in properties to support their children, provide income after being made redundant, pay for retirement, or cover the cost of care for relatives. They now face unaffordable bills.
It also noted reporting by The Telegraph that while portfolio landlords are excluded, an overseas landlord with one or two properties in Britain would be covered.
The committee report called on the Government to consider other options such as basing eligibility on the value of the company that owns the properties, or to set a higher benchmark for the number of properties a landlord can own before they are excluded.
A Government spokesman said: “We have scrapped the flawed loan scheme and delivered the most radical and far-reaching legal protections ever for leaseholders on building safety. Industry, not leaseholders, must pay to fix the problems they caused.
“We will consider the Committee’s report carefully and respond in detail. However, asking taxpayers to pay more upfront instead of developers, and to covers costs for overseas property investors, would be entirely the wrong approach.”
