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Housing

Michael Gove admits solving cladding crisis may impact affordable homes target

The housing secretary told MPs he can’t give a “cast-iron guarantee” that money meant for the £11.5bn Affordable Homes Programme won’t be diverted to pay for cladding fixes.

Michael Gove has refused to deny that finding the funds to fix cladding may hit efforts to end the housing crisis.

The housing secretary was asked whether his proposals to pay for remediation work to fix buildings with dangerous cladding would impact on the government’s £11.5bn Affordable Homes Programme if developers refuse to stump up the £4bn he has demanded.

Gove told MPs at the Levelling Up, Housing and Communities Committee inquiry into building safety on Monday: “We will do everything we can to ensure we protect it but I’ve learnt that we cannot give a cast-iron guarantee.”

Gove has taken a strong-arm approach to force house-builders to pay up in order to protect leaseholders from footing sky-high bills that could leave them facing homelessness or bankruptcy.

But the cost of replacing flammable cladding – which has already seen the taxpayer pay £5.1bn in the Building Safety Fund – could hit future house-building at a time when the UK urgently needs affordable homes to combat soaring property prices.

The National Housing Federation estimates that one in 10 housing association homes will not be built due to building safety costs. Gove said he wants to “kick the tyres” on those figures, warning they might be a “reasonable worst case scenario”. 

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Meanwhile, Gove also confirmed the long-awaited social housing white paper would be released in May or June, revealing the government’s plans to boost the amount of available affordable housing.

There remains no guarantee that developers will pay the £4bn Gove has requested with talks ongoing between the government and property firms.

The housing secretary described his cladding plans as “capturing the spirit of what campaigners asked for” but stressed the details can be “refined in the House of Lords”. Peers also debated the committee stage of the Building Safety Bill on Monday. 

“The chain is so complex that we will never have a perfect solution,” Gove told MPs.

He added: “Ultimately, the taxpayer is the backstop. That’s something the chancellor will probably shiver for me saying so.”

The housing secretary also said leaseholders who rent out more than one property will not be included in the government’s promise that no leaseholder should have to pay to address dangerous cladding. Gove argued that landlords with multiple properties may already have “significant means” to pay for remediation.

Following the committee hearing, Ben Beadle, the chief executive of the National Residential Landlords Association, said this means the government’s promises now “ring hollow”.

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“This is not about who does and does not have the means to pay. It is about fairness. No leaseholder, irrespective of how many properties they own, should be expected to foot the bill for dangerous and illegal cladding installed by someone else,” said Beadle.

“The government needs to wake up to an injustice of its own making and make amends now.”

Gove’s appearance in front of the committee came as campaigners released their own report into how the building safety crisis had affected leaseholders.

Over a third of the 352 leaseholders surveyed by End Our Cladding Scandal campaigners said they had already paid or were currently paying for interim measures and remediation costs passed on by the housing association.

The report – dubbed Dereliction of Duty – also warned that a lack of information, poor communication and poor customer service had a “severe impact” on the wellbeing and mental health of leaseholders trapped in the building safety crisis.

End Our Cladding Scandal campaigner Lucie Gutfreund said: “Housing associations may not be responsible for the building safety crisis, but they are responsible for the way they are responding to it. It is unacceptable to see such a poor levels of customer care.

“We hope that this report is a wake-up call. We will be contacting housing associations’ CEOs to ensure our recommendations are taken forward without delay.”

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