UK Govt to tax developers to cover cost of replacing flamable cladding
The UK government is introducing new levies on developers in England to help free leaseholders from the cost of replacing flammable cladding.
Housing secretary Robert Jenrick today announced a ‘Gateway 2’ developer levy on developers seeking permission to develop certain high-rise buildings in England.
In addition, a new tax will be introduced for the UK residential property development sector. This is expected to raise at least £2bn over a decade (or £200m a year) to help pay for cladding remediation costs. Details of the levy will be the subject of a consultation paper in due course.
The housing secretary told the House of Commons that the government will fully fund the cost of replacing unsafe cladding for all leaseholders in residential buildings over 18 metres in height (six storeys plus) in England.
He has added an additional £3.5bn to the £1.5bn already allocated to government support for cladding removal.
Lower-rise buildings, with a lower risk to safety, will gain new protection from the costs of cladding removal with a scheme offered to buildings between 11 and 18 metres. This will pay for cladding removal – where it is needed – through a long-term, low interest, government-backed financing arrangement. Leaseholders are promised that they will not have to pay more than £50 a month towards their cladding removal.
The government is working with industry to reduce the need for EWS1 forms (External Wall Fire Review), preventing leaseholders from facing delays and allowing hundreds of thousands of homes to be sold, bought, or re-mortgaged once again.
Hundreds of thousands of homeowners in high rise buildings have had their property blighted by the revelation their tower blocks have been wrapped in flammable cladding systems. The issue came to light after the 2017 Grenfell Tower fire in London, which caused the deaths of 71 residents. Affected leaseholders are largely unable to afford the sort of costs that freeholders have been trying to extract from them; many had been left facing bankruptcy simply due to a construction industry evidently incapable of telling apart safe building systems from lethal ones.