House builders set out plan to fix cladding crisis

Aaron Morby 4 months ago
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House builders have committed to fund remediation works on all their buildings over 11m where there are fire safety concerns as part of the sector’s response to the Government’s call for action to resolve the cladding crisis.

House builders urge rethink on looming Residential Property Development Tax
House builders urge rethink on looming Residential Property Development Tax

In response to Levelling-up Secretary Michael Gove’s ultimatum for the industry to come up with proposals or face punitive measures, the industry has set out its intent to remediate building projects over 11m.

But house builders are also calling for an immediate review of the looming Residential Property Development Tax, which will slap a 4% charge on annual profits from April this year to inject cash into the Government’s Building Safety Fund.

Members of the Home Builders Federation also want to limit remediation works strictly to building fire safety, so new building owners are not tempted to include other works in property upgrades.

In a letter to the Secretary of State, the Home Builders Federation has set out its three-point plan to tackle the cladding crisis.

This included a compromise offer that HBF members would withdraw from using cash from the Building Safety Fund to self finance fixing blocks over 18m in height.

Home Builders Federation three-point plan

  • Resolving fire safety concerns on all our buildings over 11m
  • Remediating buildings dating back to 1st January 2000
  • Withdrawing from the Building Safety Fund – applicable to buildings over 18m

The HBF estimates the Residential Property Development Tax would raise £3bn in total from the residential development sector, £1bn more than the Treasury estimate of £2bn.

“In addition, we would point out that our members have committed or already spent around £1bn remediating buildings they have been involved in developing,” writes HBF executive chairman Stewart Baseley.

“The RPDT was specifically set up to partly fund the BSF so given that members are now considering taking on the BSF liability then the purpose of the RPDT needs to be evaluated.”

Baseley, adds: “We must ensure that programmes of works are tightly focused on building fire safety and not being used to provide extraneous upgrades for building owners.

“Our experience of working with ambiguous or misplaced guidance in relation to the mortgageability and insurability of homes has shown that a solution will be dependent on all actors, including Government, working towards the same aims.

“Only with ongoing support from Government and a clear commitment to work with the industry in its broadest sense, including surveyors, building owners, lenders, insurers and product manufacturers over the coming weeks can we turn our proposal into a fully practical solution for leaseholders.”

A Department of Levelling-up spokesperson said: “We welcome this progress in our negotiations with the industry, but developers have not yet gone far enough.

“They must work with us intensively in the coming weeks to agree a fully funded plan to fix unsafe buildings.

“We have been clear that if they do not, we will impose a solution.”

 

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