Developers could be blocked from housing market if they don't fix cladding

Michael Gove has unveiled plans to effectively block housing developers from building and selling new homes if they do not pay to fix properties caught up in the cladding crisis.

The housing secretary announced new amendments will be brought forward at next week’s Building Safety Bill committee hearing in the House of Commons to block planning permission and building control sign-off if developers or product manufactures don’t pay.

The move comes weeks before Gove’s early March ultimatum for developers to find a £4bn plan of action to remove unsafe cladding on buildings between 11 and 18 metres in height.

Scores of leaseholders around the county have faced bankruptcy or homelessness over the huge bills to remove cladding or fix fire defects at their homes after the Grenfell Tower fire uncovered the building safety crisis.

Gove said: “It is time to bring this scandal to an end, protect leaseholders and see the industry work together to deliver a solution.

“These measures will stop building owners passing all costs on to leaseholders and make sure any repairs are proportionate and necessary for their safety.

“All industry must play a part, instead of continuing to profit whilst hardworking families struggle.”

Gove has reiterated several times that leaseholders must not face huge bills to make their homes safe since he took over as housing secretary in September last year.

But his hardline stance has faced significant pushback from building firms after he asked them to pay up to fix homes. The Times reported on Saturday that barrister Lord Pannick QC had advised the government that legal sanctions would be unlawful.

However, that has not prevented Gove from announcing amendments to the government’s Building Safety Bill to pay for cladding remediation.

Discussions with building industry leaders remain ongoing, according to the government, with “progress being made”.

But firms who are unwilling to agree to Gove’s terms will be blocked from gaining planning permission to build new homes or to sign-off buildings as safe if the government’s legal powers are approved in parliament.

The government will also be able to apply its new building safety levy to more developments under the plans.

Gove also promised that courts will be given new powers to stop developers using “shadowy shell companies” to avoid contributing cash.

Building owners and landlords will be able to take legal action against manufacturers found to have used defective products on a home later found unfit for habitation, too, with a limitation of 30 years.

Gove added: “We cannot allow those who do not take building safety seriously to build homes in the future, and for those not willing to play their part they must face consequences.

“We will take action to keep homes safe and to protect existing leaseholders from paying the price for bad development.”

As well as cladding costs, many people caught up in the building safety crisis also face costs for other fire defects.

The government also announced that developers that still own a building over 11 metres in height they have built or refurbished or landlords linked to an original developer will be required to pay to fix historic building safety issues at the property.

It’s the same story for building owners who can afford to pay but are not linked to the original developer.

Monday’s announcement also laid out what will happen where building owners can’t afford to pay. A cap will be introduced to ensure leaseholders outside London can only pay £10,000 to fix defects or cover waking watch charges while those living in the English capital will pay no more than £15,000. The cap takes into account money already paid out in the last five years.

The government said the cap will mean many leaseholders will not pay a penny more, but some of the people caught up in the crisis have warned the plan is at odds with Gove’s previous statements that leaseholders should not have to pay for repairs.

Steve Day, a resident of Royal Artillery Quays in Woolwich, has been developing the Polluter Pays amendment – resident-driven solution to the cladding scandal.

Day’s proposed solution would enable the government to pursue remediation and interim fire safety costs from developers and other responsible parties without time limitation while saving taxpayers from the bill to fix homes.

He told The Big Issue that the amendment he has designed would protect leaseholders from non-cladding costs if adopted by the government.

Day said: “This announcement does not go far enough. Leaseholder contributions shouldn’t be considered at all and certainly not before we have made all those guilty parties pay in full with the Polluter Pays amendment elastic backstop which will cover non cladding costs and interim costs as well.

“It’s shocking. We desperately need the Polluter Pays amendment.”

A spokesperson for campaign group End Our Cladding Scandal said the announcement is the “most positive step forward we have yet seen in the building safety crisis”.

But there was further criticism for the leaseholder cap. The spokesperson added: “Since 2017, successive ministers have said in the Commons that leaseholders should not have to pay to fix buildings they don’t own – but here we see some may have to. How is this fair?

“While these may seem small sums to ministers, they are enormous amounts to many ordinary people across the country – especially coming at a time of pay freezes, food price rises and energy cost hikes. How does any of this fit in with Mr Gove’s levelling up agenda?”