Government Signals Further Support for Building Safety Costs

As we have previously commented, the Government has introduced legislation to protect homeowners from the cost of fixing historical safety defects in the buildings they live in. Homeowners will now pay either nothing, or a lifetime capped amount, according to their circumstances.

The recent Building Safety Act introduced controls on when such costs could be billed to the service charge. Additionally, 49 major “Pledge Developers” have committed to fix and pay for problems in buildings higher than 11 meters originally developed by them. Costs for unsafe cladding on buildings more than 18 meters in height are otherwise recoverable from the Building Safety Fund.

The government has now put a bit more meat on the bone regarding its proposed Building Safety Levy, a potential further line of funding.

In a press release last week, the Department for Levelling Up, Housing and Communities summarised its latest thinking on the proposals and launched a further round of consultation on them.

In essence, under the proposals housing developers will pay a levy on new homes built by them, to be used to put right safety problems on existing buildings.

The objective is to raise at least £3bn, in addition to the £2bn estimated contribution from Pledge Developers and £5.1bn in existing taxpayer support.

Current proposals are still light on detail but it seems that the levy will provide funding to fix faults in buildings over 11 meters in height, further protecting homeowners, with funds targeted at “orphan” buildings, where the original developer no longer exists. What remains to be seen from the consultation document is whether funding from the levy will extend to the remediation of wider building safety problems such as inadequate fire compartmentation, not just cladding, something that will be a key concern to many leaseholders.

This is welcome progress on an important piece of the puzzle that is solving historic building safety issues. However, the Government needs to land on the fine detail both of the Levy and developer pledge very quickly to avoid more delay in remediation projects.

We will provide further reports as the funding arena develops. The direction of travel appears positive, but, for many homeowners worried about the cost of remediating building safety defects, not fast enough.