35 developers have pledged to pay £5bn towards fire safety remediation, the Department for Levelling Up, Housing and Communities (DLUHC) has announced.
Building Safety Levy
The government also announced that the Building Safety Levy will cover new residential buildings in England of all sizes, which is expected to raise a total of £5bn over the next ten years – £2bn of which will come from the 35 developers to fix their own buildings, and the remaining £3bn from an extension to the Building Safety Levy, chargeable on all new residential buildings in England.
The levy will be payable by developers when pursuing planning permission for a new block. This was previously only applicable to buildings taller than 18 meters, under the first drafts of the Building Safety Bill.
Developer's duties
The funds raised by the extended levy will be used to pay for “orphan blocks,” meaning those buildings where the responsible parties cannot be identified or forced to pay by law.
According to the government’s announcement, developers will:
- Act as quickly as possible to fix buildings.
- Implement new proportionate guidance on building safety.
- Regularly report to leaseholders and the government on their progress.
- Respect an independent dispute resolution process established by the government.
- Refund money already received from the taxpayer to fix their buildings.
This pledge will become enforceable by law and will see the developers undertake an estimated £2bn of work to address fire safety issues in any buildings they have built over the last 30 years.
pledge letter
With the principle, leaseholders should not have to pay for any costs associated with life-critical fire-safety remediation"
The pledge letter that the 35 developers have signed states that: “We agree with the principle that leaseholders should not have to pay for any costs associated with life-critical fire-safety remediation work arising from the design, construction or refurbishment of buildings of 11 meters and above that they live in, and we want to work constructively and in good faith with you and building owners/responsible parties to achieve this.”
As a result of the pledge, developers have also agreed to: “Undertake or procure at its own costs… as quickly as reasonably possible all necessary remediation and/or mitigation work to address life-critical fire safety defects.”
new measures
Housing Secretary Michael Gove has issued a warning that there will be consequences taken against developers who do not sign up. Mr. Gove also said, "Today marks a significant step towards protecting innocent leaseholders and ensuring that responsible pay to solve the crisis they helped to cause. I welcome the move by many of the largest developers to do the right thing."
He adds, "But this is just the beginning. We will do whatever it takes to hold the industry to account, and under our new measures there will be nowhere to hide."
make buildings safe
It is right that all developers who built these homes take responsibility and this must include paying"
Rhys Moore, Executive Director of Public Ompact at the National Housing Federation, said, “This agreement marks great progress made by the secretary of state in ensuring that innocent leaseholders are not met with crippling and unjust costs."
He adds, “It is right that all developers who built these homes take responsibility and this must include paying to make buildings safe where social housing residents live. By paying to fix their mistakes, developers can protect people on low incomes from footing the costs, and ensure the future supply of affordable housing.”
fund first, fix now
Not everyone welcomed the news however – The UK Cladding Action Group cast doubt on the pledge being “non-binding,” and worried that this crisis was due to continue for leaseholders. The group tweeted, "This is not a victory Mr Gove. Not for leaseholders who remain trapped for years as developers wrangle over what to remediate & for how much."
"Govt must fund first, fix now, collect later."