The Levelling Up, Housing and Communities (LUHC) Committee has published its Building Safety: Remediation and Funding report.
The Committee launched their inquiry following the announcements made by Secretary of State Michael Gove in his statement to the House of Commons on 10 January. On 14th February, the government set out its proposed amendments to the Building Safety Bill, illustrating how it would enshrine in law its protections for leaseholders and its powers to penalise industry players who do not cooperate. The proposals would exclude landlords from the protections for leaseholders, except those who only own one other property besides their residence. They would also introduce of a cap on costs for leaseholders for remediating non-cladding defects of £10,000 (£15,000 within London).
In their report, the Committee said:
“It has always been our position that leaseholders should not pay a penny to rectify faults not of their doing and to make their homes safe. We have previously called on the government for a Comprehensive Building Safety Fund that would cover all costs for all fire safety remediation in buildings of any height.
The Secretary of State said the government would protect leaseholders from remediation costs, but too many leaseholders will fall through the cracks of the government’s piecemeal measures. Leaseholders are no more to blame for non-cladding defects than they are for faulty cladding on homes they bought in good faith.
Buy-to-let landlords are no more to blame than other leaseholders for historic building safety defects, and landing them with potentially unaffordable bills will only slow down or prevent works to make buildings safe. Leaseholders of buildings under 11m in height are no more to blame than other leaseholders.”
The Committee went on to make the following recommendations:
- The government should scrap the cap on non-cladding costs for leaseholders.
- Instead of its piecemeal method of funding remediation according to building height and type of defect, the government should implement our previously recommended Comprehensive Building Safety Fund. The fund should cover the costs of remediating all building safety defects on buildings of any height where the original “polluter(s)” cannot be traced.
- The government must publish, within two months, all available data on the number of buildings of all heights with historic building safety defects – cladding and non-cladding – including data it has received from developers and manufacturers
- The government should identify all relevant parties who played a role in the building safety crisis, such as product suppliers, installers, contractors, and subcontractors. It should legally require them, as it has done for developers, to (i) contribute payment to put right any individual faults in which they played a part and (ii) contribute to collective funding for building safety remediation—ideally our recommended Comprehensive Building Safety Fund. So that efforts to identify responsible parties do not delay remediation works, the Government should, where necessary, fund works upfront and recoup its costs.
- The government should remove VAT on building safety activity.
- Insurers should be required to contribute to funds for remediation as they covered the actions of developers who failed to comply with building safety and have since received increased premiums despite remediation works being undertaken.
- The government must take steps to hold overseas developers and other relevant foreign firms to account. When it is appropriate to do so, the government should set out the actions it has taken.
- The government should table new amendments to the Building Safety Bill to ensure that, where the “polluter(s)” still exist, industry players Building Safety: Remediation and Funding 5 must compensate leaseholders for remediation and interim costs already paid out and must pay for works that have been started or specified. In line with principles already set out by government, where the original polluter no longer exists or cannot be identified, funding for building safety remediation—ideally our recommended Comprehensive Building Safety Fund—should cover the costs of compensating leaseholders for costs already paid out, including interim measures and exorbitant rises in insurance premiums.
- Social landlords must have full access to funds for building safety remediation—ideally our recommended Comprehensive Building Safety Fund.
- The government must commit to protecting the Affordable Homes Programme at its current level should it fail to recover sufficient funds from industry.
- The government must ensure that there is professional indemnity insurance cover for those conducting PAS 9980 assessments—whether as an extension of the scheme for external wall assessors or as a separate scheme. We ask the government to monitor and report back to this Committee with its assessment of the impact of the introduction of PAS 9980 on the numbers of buildings that need to be inspected and remediated. We also ask the government to report back to the Committee with its estimate of the number of currently qualified fire risk assessors and how this will increase in the coming months.
- The evidence we received clearly indicates that it should be the regulator— and not building owners—who decides whether a building needs a fire risk assessment. As such, we recommend that the Building Safety Regulator decides whether a building needs a fire risk assessment; sets the standard that a building need to meet; sets out the methodology for undertaking assessments; and provides a review process which enables consistency of decisions.
Timothy Douglas, Head of Policy and Campaigns for Propertymark, said:
“From the outset, we have argued that there is no logical basis to exclude buy-to-let landlords from the same level of financial support as owner-occupiers.
The committee’s firm rejection of the assumption that all landlords are ‘wealthy tycoons’ who can afford to pay, so should pay, is welcome, but what we need now is the same acknowledgement from the UK Government.
It is simply not the case that all landlords have significant financial means. Our member letting agents who work closely with landlords are clear in their message to us that many are extremely concerned about the huge financial hardship they are facing.
The Secretary of State has repeatedly said that those who are not responsible for this crisis should not have to pay, so we urge him act on that principle and take away the uncertainly by accepting the recommendations in the committee’s report without delay.”
Mr Gove recently issued a response letter to the Home Builders Federation on their proposals to pay for building safety, dated 7th March. Mr Gove stated, that while the commitment that developers will fund the remediation of fire safety defects in buildings they had a role in developing above 11 metres – without drawing on the Building Safety Fund – is welcomed, Gove said he finds that the current proposal issued by developers “falls short of full and unconditional self-remediation that I and leaseholders will expect us to agree”.
