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4 May 2022

Building Safety Act: what help will leaseholders get with cladding issues?

Support for homeowners has been passed into law but campaigners say it isn't enough
Protester at a cladding scandal protest dressed in a black and white striped 'prisoner' outfit, wearing sunglasses, and holding a sign that reads 'END THE CLADDING SCANDAL'

The newly passed Building Safety Act enshrines the government’s support for cladding-afflicted homeowners in law. But concerns remain over gaps in the legislation, which could leave leaseholders on the hook. 

Ministers hailed the act as a huge step forward for building safety, nearly five years on from the tragic Grenfell Tower fire. 

But since 2017, a wide-ranging building safety scandal has been uncovered, with thousands of people across the country living in flats that have been deemed unsafe after fire safety inspections. 

Many leaseholders who live in these buildings have already been sent bills for hundreds of thousands of pounds to remove cladding and fix other safety defects, and already paid huge sums for interim safety measures such as round-the-clock fire wardens known as waking watches.

Campaigners say many leaseholders are ‘still not fully protected’ from building safety costs even with the new law. 

‘There are still far too many gaps and unanswered questions on just if, when and how all buildings will be made safe at any real pace,’ said Giles Grover of the End Our Cladding Scandal campaign group.

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What's in the Building Safety Act?

One of the Act’s central pillars is the introduction of a new building safety regulator, which will have the power to sanction home builders that breach safety rules. 

In terms of direct support for leaseholders, the act enshrines the ‘waterfall’ approach to building remediation for blocks taller than 11 metres. This will see a building’s developers called on to pay for remediation first, followed by its freeholder. 

If either party ‘does not have the resources to pay’, leaseholders will foot the bill themselves. Their contributions will be capped at £10,000 outside London and £15,000 in London if this happens. 

Campaigners have noted that this goes against housing minister Michael Gove’s assertion that leaseholders should not have to pay anything to remove unsafe cladding. 

In a November meeting with the Housing, Communities and Local Government committee, Gove said: ‘I'm still unhappy with the principle of leaseholders having to pay at all, no matter how effective a scheme might be in capping their costs or not hitting them too hard at any one time.’

Though the act has passed into law, it will take 18 months for all of its measures to come into effect.

Hear more: the Which? Money podcast talks to leaseholders at a cladding scandal protest last summer.

Why aren't campaigners happy with the Act?

Low-rise buildings aren't always covered

One of the gaps in the Act is a lack of guaranteed protection for leaseholders in buildings under 11 metres. 

The government says these are deemed less of a fire risk, but that doesn’t stop them from potentially failing EWS1 fire safety inspections, making them near impossible to sell. 

Ministers have said that buildings of this height will be looked at on a case-by-case basis if they need remediation, but they stopped short of providing blanket support for them.

Leaseholders might still pay

The £10,000 or £15,000 cap on payments has also been criticised as unaffordable to many leaseholders. Though smaller than the bills of hundreds of thousands some were served before, it’s still £10,000 more than any leaseholders expected to pay to fix problems they didn’t cause and didn’t know about when they bought their homes. 

On top of this, many developers still haven’t agreed to this arrangement, which at the moment is based on signing up to a government pledge. The government has said developers could face sanctions if they don’t agree. 

End Our Cladding Scandal’s Giles Grover said: ‘There remains a lack of clarity on when the developers who have signed the pledge will actually start work at the buildings they developed and whether the “life-critical fire-safety” works they agree to resolve will be to the extent needed to finally free those trapped in this living nightmare.’

No immediate help with insurance

Then there’s the matter of buildings insurance premiums, which have skyrocketed for buildings deemed unsafe. We found bills ballooned by more than 500% between 2019 and 2020, when many buildings had their inspections. 

While the government is working with the insurance industry to address the problem, the Act won't bring bills down right away.

It might be too slow

The Act has also generally been condemned as overcomplicated, making it difficult for leaseholders to tell when they are or are not protected from having to pay.  In particular, ‘unanswered questions’ remain over what support is available for buildings managed or owned by resident volunteers, said Grover. 

Campaigners want the government to front the money needed for remediation now so buildings can begin work right away. Otherwise, the ‘waterfall’ process of finding out who is responsible for payments could continue to delay any fixes. 

Grover said: 'Despite Michael Gove’s warm words in January, explicitly acknowledging that leaseholders are blameless and that it would be morally wrong to ask us to pay the price, ordinary people across the country are still on the hook for thousands of pounds to make homes safe.'