Government threatens to shut out from housing market developers that refuse to act on cladding

The Government has unveiled measures that will allow it to block planning permission and building control sign-off on developments brought forward by those in the housebuilding “not doing the right thing” over the removal of cladding.

The Department for Levelling Up, Housing and Communities (DLUHC) said this would effectively prevent those companies from building and selling new homes.

The measures unveiled by the Secretary of State for Levelling Up, Michael Gove, include allowing the Government to apply its new building safety levy to more developments, “with scope for higher rates for those who do not participate in finding a workable solution”.

The DLUHC said: “The Government hopes to not have to use these powers; it wants responsible developers and manufacturers to operate freely and with confidence, to help deliver the homes people need. If they do not act responsibly, they must face commercial and financial consequences.”

Courts will also be given new powers to stop developers “using shadowy shell companies, which make them difficult to trace or identify who they are run by, so they can avoid taking responsibility for their actions”.

If passed by Parliament, these amendments to the Building Safety Bill will be brought into law.

Secretary of State for Levelling Up Michael 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 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.”

Cost Contribution Orders will meanwhile be able to be placed on manufacturers who have been successfully prosecuted under construction products regulations. These orders will require them to pay their fair share on buildings requiring remediation.

“It is wrong that, until now, a manufacturer could be found guilty of misconduct but could not be charged to fix the problems they caused in selling defective products,” the Department said.

Amendments to the Building Safety Bill will also allow building owners and landlords to take legal action against manufacturers who used defective products on a home that has since been found unfit for habitation. The power will stretch back 30 years and allow recovery where costs have already been paid out.

New clauses will also enshrine in law the commitment the Levelling Up Secretary made in the House of Commons last month that no leaseholder living in their own home, or sub-letting in a building over 11m, will pay anything for the removal of dangerous cladding.

“If passed by Parliament, these clauses will hugely reduce the invoices that have been sent to leaseholders for taking down cladding, in some cases for over £100,000.”

The measures announced by the Government are in addition to the package outlined last month. Under the plans, developers that still own a building over 11m that they built or refurbished – or landlords linked to an original developer – will be required to pay in full to fix historic building safety issues in their property.

Building owners who are not linked to the developer but can afford to pay in full will also be required to put up the money to do so, the Government said.

Where building owners do not have the resources to pay, leaseholders will be protected by a cap. The cap will be set at similar levels to ‘Florrie’s Law’ which applies to some repairs to social housing: £10,000 for homes outside London and £15,000 for homes in the capital. This will limit how much leaseholders in this scenario can be asked to pay for non-cladding costs, including waking watch charges.

Any costs paid out by leaseholders over the past five years will count towards the cap, meaning some leaseholders will pay nothing more.