Since the horrific fire at Grenfell Tower on 14 June 2017, the ramifications for those living in other flats with unsafe or potentially unsafe cladding have been both complex and highly challenging.

On 30 January, in the latest chapter seeking to solve the multiple issues, Michael Gove, the Secretary of State in the Department of Levelling Up, Housing and Communities (DLUHC) issued a new Ministerial Statement in relation to cladding. The statement is a clear demonstration of the government playing hardball with developers in England.  This is a move which, including the existing Building Safety Levy, will see developers paying a total of some £5 billion for repairs to make safe buildings that are over four storeys or 11 metres high and were developed or refurbished over the past 30 years.  

According to the announcement, some 49 developers have now received legally binding contracts that will commit them to pay for these life-critical fire-safety repairs and to reimburse the taxpayer for money already spent making their buildings safe. The government has set a six-week deadline for all developers who were invited to discussions to sign the contract. Further developers will be invited to sign the contract in the near future. 

Regulations will be laid in the spring of this year to create a Responsible Actors Scheme in England, which the government intends to establish under powers that they have in the Building Safety Act. All those who fail to sign or comply with the terms of the contract will be ineligible to join the scheme. Being outside the scheme means that those companies may face new restrictions to their ability to operate in the housing market, including, ultimately, being prevented from developing land in England until they comply.

At the same time the Secretary of State also reminded building owners that they must fix unsafe buildings without delay, and that there will be consequences should they fail in that obligation. 

Persimmon has gone public to say that it intends to be the first developer to sign the contract and Dean Finch, Group Chief Executive at Persimmon, said: 

“Persimmon was proud to lead the industry two years ago with our original pledge to protect leaseholders. Since then, we have been making good progress on remediation and aim to be on site on all developments by the end of the year.

“The publication of the developer remediation contract is the culmination of many months of hard work on all sides and we are pleased to confirm our intention to sign the final document in the near future, becoming the first developer to do so.

“The terms of the contract are entirely consistent with our existing commitment to protect leaseholders in multi-storey buildings we constructed from the costs of remediating cladding and life-critical fire-related safety issues. We are pleased to reaffirm this commitment today and that we were able to work constructively with the Government to secure the agreement.”

From 9 January this year the largest lenders in the UK committed to consider mortgage applications for the purchase of flats affected by cladding.  One important criterion was the need for evidence of affected buildings being self-remediated by developers, covered by a recognised Government scheme or by leaseholder protections contained in the Building Safety Act.  The developer contract should speed up self-remediation by developers which is helpful both to lenders and borrowers.  Under a sector voluntary agreement, those already in an affected flat where a fixed rate mortgage comes to an end can already get a new mortgage of the amount from their existing lender.     

It is to be hoped that these measures signal the final chapters of this issue, which has been so difficult for so many.

Read more: 

1. The developer contract
2. The lender statement made on 20 December 2022

.