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9 Nov 2021

Leaseholders shouldn't pay for cladding scandal, says Gove

The Housing Secretary has 'paused' the proposed £50-a-month loan scheme

Housing Secretary Michael Gove has said homeowners in unsafe buildings shouldn't have to pay to get them fixed.

This comes as leaseholders affected by the cladding scandal are receiving bills for tens or even hundreds of thousands of pounds to fix buildings they believed to be safe.

As the scandal continues to devastate leaseholders' finances and mental health, a cross-party committee of MPs quizzed Gove on his plans to end the crisis.

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Loan scheme put on hold

The Housing Secretary told the Housing, Communities and Local Government Committee that leaseholders are 'innocent parties' who are being billed 'disproportionate sums'.

A proposed loan scheme for homeowners living in blocks between 11 and 18 metres tall, announced by previous Housing Secretary Robert Jenrick, has been paused, Gove revealed. It would have seen leaseholders paying up to £50 a month to remove cladding, and was roundly criticised by campaigners.

Gove told the committee: '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. My question is why do they have to pay at all?'

Despite expressing sympathy for leaseholders, Gove did tell MPs that he may have to return to the committee or the House of Commons at a later date and say, 'I've tried and I've tried and I've tried, but I fear for the following reasons, it's too difficult,' to achieve what's been dubbed a 'polluter pays' approach, where culpable developers and manufacturers pay for remediation.

How was the leaseholder loan scheme going to work?

Many leaseholders will be relieved to hear what some called the 'forced loans' scheme has been put on hold.

Then-Housing Secretary Robert Jenrick announced the scheme in February, and there have been no official updates on its progress until now.

At the time, he said it would see leaseholders in four to six-storey buildings paying at most £50 a month for cladding removal.

Giles Grover of the End Our Cladding Scandal campaign group said: 'We welcome the Secretary of State, Michael Gove's statements today with cautious optimism.

'Mr Gove's statement on pausing the forced loans scheme is a step in the right direction; however, we must see this unfair attempt at a solution consigned to history rather than simply paused.

'Equally, it sounds positive that he will endeavour to ensure that those responsible for this crisis are the ones that are made to pay to put things right.'

Grover urged Gove to back up his positive rhetoric with actions. He told Which?, 'Leaseholders across the country are now all too aware that it is deeds and clear action that matter and not simply kind words - until Mr Gove delivers a solution that truly ends this scandal for once and for all, leaseholders will continue to suffer, to experience bankruptcy and potential homelessness amidst a wider mental health crisis.'

What is the government doing to help leaseholders?

The government has long said that leaseholders shouldn't have to pay for the cladding scandal, but its actions haven't stopped that from happening.

While government funding is available for leaseholders, there are huge gaps that leave them on the hook.

The £5bn Building Safety Fund, which Chancellor Rishi Sunak re-announced at the recent Budget, pays to remediate cladding in buildings over 18 metres tall. Some leaseholders who believe their buildings are eligible for the Building Safety Fund have told us of difficulty securing the funding. Those in buildings under 18 metres are ineligible.

The £30m Waking Watch Relief Fund pays for fire alarms in buildings over 18 metres that have waking watches in place, though this isn't thought to be enough to fund fire alarms for all buildings in this situation. Despite its name, it doesn't directly fund bills for waking watches - 24/7 fire patrols that can cost leaseholders thousands a month.

Leaseholders are also facing skyrocketing buildings insurance bills. It has been reported that Michael Gove was exploring ways for the government to help with insurance bills, but he didn't mention this at his committee appearance.

Read more leaseholders' stories

Leaseholders are a blameless party in the cladding scandal, and they shouldn't be left suffering financially and mentally as a result of the failings of regulation and industry.

Last week, we published the story of three parents, each of whom helped their children buy their first home. Now, all three children are facing unaffordable bills due to fire safety defects discovered following the Grenfell tragedy.

You can read about their experiences here, and the rest of our cladding scandal coverage here.

Listen: the Which? Money Podcast talks to leaseholders and campaigners at a cladding scandal protest.