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Small-scale landlords to benefit from new cladding scandal deal

The government says major house builders have agreed to spend £2 billion on fixing the dangerous cladding on their own buildings, in addition to contributing towards a levy which will see an additional £3 billion spent on the problem.

The issue is of significance to landlords because the government recently included small scale landlords in the remedial works, so long as they have three or fewer investment properties - larger scale and portfolio landlords remain excluded.

Under the new agreement, which will become legally enforceable, over 35 of the UK’s biggest homebuilders have pledged to fix all buildings 11 metres-plus that they have played a role in developing in the last 30 years.


For the companies yet to make the pledge, Housing Secretary Michael Gove has said there is little time left for them to sign up, and that those who continue to refuse will face unspecified consequences if they fail to do so.

As set out in January, a new government scheme will also see industry pay to fix buildings where those responsible cannot be identified or forced to in law. This follows previous confirmation that plans for a 30-year loan scheme paid for by leaseholders would be scrapped.

The new scheme will be funded through an extension to the Building Safety Levy that will be chargeable on all new residential buildings in England. 

This is expected to raise up to an additional estimated £3 billion over ten years from developers and ensure no leaseholder in medium-rise buildings faces crippling bills, even when their developer cannot be traced.

New proposed laws, announced in February under the Building Safety Bill, will ensure qualifying leaseholders are protected from the costs of historical building safety defects, including total protection against cladding costs. 


Gove says: “[This] marks a significant step towards protecting innocent leaseholders and ensuring those 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. But this is just the beginning. We will do whatever it takes to hold industry to account, and under our new measures there will be nowhere to hide.

“The pledge published by government today commits developers who have signed up to legally binding contracts, and to implement their promises as soon as possible.”

The detailed agreement confirms developers will act as quickly as possible to fix buildings, implement new proportionate guidance on building safety, regularly report to leaseholders and government on their progress, respect an independent dispute resolution process established by government; and refund money already received from the taxpayer to fix their buildings.

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