Building Remediation Costs

The Building Safety Act 2022 protects leaseholders from costs associated with historical building safety defects. Qualifying leaseholders and buildings of above 11 metres in height are fully protected from unsafe cladding remediation costs. There are also robust and far-reaching protections from non-cladding costs, with leaseholder contributions being a last resort and firmly capped. Where a freeholder is linked to the original developer, leaseholders will now pay nothing.

Leaseholders in my constituency have been pleased with the progress that has been made through the Building Safety Act. However, it is disappointing that some developers are yet to sign up to the building safety pledge. Could my right hon. Friend outline what support is in place for leaseholders in buildings of over 11 metres who find themselves in that situation?

I am very grateful to my hon. Friend for raising that particular question. Some 45 of the biggest 53 developers have so far signed the pledge to remediate buildings for which they are responsible. However, I know there are developments in my hon. Friend’s constituency where the developers are not among those who have signed up yet. We will be moving developer by developer and owner by owner to ensure that those responsible relieve leaseholders of their obligations, and I will stay closely in touch with my hon. Friend as we make progress.

We have all had cases where a developer who is at fault closes down on a Friday evening and then reopens on the Monday morning under a different name, as that avoids any kind of sanction or prosecution. Will the Secretary of State look at allowing the prosecution of individual directors only in those extreme cases of deeply questionable developers?

Yes, absolutely.

My right hon. Friend has done excellent work on protecting leaseholders over the cladding scandal as a result of revisiting Government policy. Will he revisit another Government policy that affects leaseholders badly: the encouragement of building new floors on top of existing apartment blocks? Having experienced this disaster myself, I know only too well how shoddy workmanship then leaves leaseholders picking up the bills for a development that they did not want and they had to endure for months on end.

My right hon. Friend has, with his characteristic assiduity, already raised this question with me both formally and informally, and I appreciate the unfortunate consequences that some have to face, but we obviously need to balance protecting the rights of leaseholders with ensuring that, through the proper application of permitted development rights we can in a sensitive way increase accommodation and make sure that we have a process, particularly in urban areas, that allows us to provide more homes without encroaching on valuable green land. As ever, however, we need to keep under appropriate supervision the use of permitted development rights, and the case my right hon. Friend raises will be one that weighs on my thinking.

The Secretary of State will know that an associated problem for many leaseholders is the very high cost of insurance premiums; that affects many of my constituents in Cambridge. What is he doing to address that?

My noble Friend Lord Greenhalgh, Minister for building safety and for fire safety, has been in conversation with the Association of British Insurers, and Baroness Morgan of Cotes has been discussing with him exactly how we might move to a happier situation. I hope to be talking to both insurers and mortgage lenders in the next few weeks in order to move the landscape forward.

I greatly welcome the legislation that will protect leaseholders when developers are at fault, but what happens if a developer undertakes work, such as cladding, which at the time met building regulations but subsequently has been shown to be unsafe? Who gets protection then?

My hon. Friend raises an important question, and here I have an opportunity to thank those developers, as well as the House Builders Federation, who have acknowledged that they were part of a regulatory system and that even those who sought to do the right thing were on occasions required to accept an ethic of shared responsibility; they have accepted it and for that reason leaseholders, who have no responsibility and no blame to shoulder, are protected.