CABINET TUSSLE OVER £10BN POT FOR CLADDING VICTIMS
... and experts warn it STILL won’t spare leaseholders from pain of 30-year loans to fund repairs
PRESSURE is mounting on the Chancellor to sanction a £10billion rescue package for families hit by the building safety scandal.
Rishi Sunak is being pressed by Housing Secretary Robert Jenrick to come up with a multi-billion-pound deal to repair homes with dangerous cladding. Ministers are considering imposing a levy on construction firms to make them atone for building tens of thousands of flats and homes with unsafe cladding and insulation.
Last night well-placed sources told the Daily Mail of ‘intensive efforts’ to persuade the Treasury
to add a substantial sum to the ‘developers levy’, potentially raising the pot to £10billion.
But leaseholders fear the plans do not go far enough and will still lumber them with huge long-term loans to pay for Britain’s estimated £15billion post-Grenfell repair bill.
Property experts say loans could hit the value of their homes by up to 30 per cent. Hundreds of thousands of leaseholders face average costs of £40,000 each – and some of up to £115,000 – to replace dangerous cladding.
This week Labour leader Sir Keir Starmer vowed to force ministers to tackle the ‘huge injustice’ of leaseholders being trapped in unsafe and unsellable flats.
He is holding an Opposition Day debate on the cladding crisis in the Commons on Monday, where he will demand that the Government provide immediate funding to fix unsafe buildings and protect homeowners from the costs.
The Mail has learned ministers are considering other ways to cushion the financial blow to families hit by the cladding nightmare. They include:
■ A hardship fund to give extra help to hard-up families facing the biggest repair bills.
■ A cap on repayments to help those facing repair bills of up to £100,000.
■ Prioritising grants for those in high rise blocks who are at most risk.
■ A five-year freeze on loan repayments so the repairs are ‘free’ until 2026 or later.
A Government source said: ‘Clearly a large amount of money is needed to help leaseholders.
‘It is right that the construction industry which has made billions in
Building firms’ £15bn bonanza since Grenfell From the Mail, January 6
profits in recent years should pay a cladding levy spread over many years. But the Treasury will have to find a large sum as well.’
But leaseholders say they will still be saddled with costly loans for up to 30 years to pay for a building blunder that was not their fault.
They are already paying at least £2.2billion a year between them for stop- gap safety measures and insurance hikes while they wait for work to begin.
The Mail is campaigning for ministers to repair Britain’s dangerous buildings within 18 months and spare leaseholders the crippling financial burdens.
We are also demanding that developers responsible for defects pay their fair share, minimising the burden on the taxpayer.
The Mail revealed this month that the biggest housebuilders have made more than £15billion in profits since the Grenfell disaster in 2017, allowing them to pay shareholders dividends of £5billion.
Since 2008 they have also benefited from billions of pounds of public subsidy via Help to Buy and Shared Ownership schemes.
Jake Ellis, spokesman for the campaign group End Our Cladding Scandal, said: ‘All responsible parties – regulators, manufacturers and developers – [should be] made to pay to resolve a problem they collectively created.’
MPs from the All-Party Parliamentary Group (APPG) on leasehold reform say they were left with grave concerns following a meeting earlier this month with Government adviser Michael Wade.
They are convinced leaseholders will still have to pick up most of the tab.
APPG co-chairman Justin Madders
said he understood ministers are ‘going ahead’ with a loan scheme that ‘puts the majority of costs on the unquestionably innocent party’.
he told the Mail: ‘The Government is going to frontload it in a way that gets the work done, but ultimately saddles people with huge debts.’
A Government spokesman said: ‘We are considering a range of options to fund remediation work and no final decisions have been made. We will continue to work with stakeholders including leaseholders and the finance industry. Further details will be set out in due course.’
It had been expected Mr Sunak would unveil the scheme in March’s Budget, but Boris Johnson said last week that Mr Jenrick would outline the plan shortly.