Housebuilders pledge to pay £5bn to fix unsafe homes

Developers have pledged to pay a combined £5bn to fix buildings with dangerous cladding and other fire safety issues, according to the housing secretary.

Thirty-five of the UK’s biggest housebuilders have signed an agreement to pay a minimum of £2bn to fix their buildings.

Another £3bn is expected to be raised through an expansion to the Building Safety Levy that will be chargeable on all new residential buildings in England.

Announcing the move, Michael Gove warned those who do not sign up to the voluntary pledge could be banned from new construction.

Thousands of developments were found to have dangerous cladding and other safety issues in inspections prompted by the Grenfell disaster.

Many innocent leaseholders found they were legally responsible for huge bills to fix the problems, while others were unable to sell as banks refused to lend without expensive remedial work.

A previous scheme was limited and only provided financial help for people in buildings over 18m.

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The new agreement will see homebuilders fix all buildings over 11m they have developed over the last 30 years – still apparently leaving people in lower-rise homes exposed.

Major builders such as Persimmon, Barratt Developments, and Taylor Wimpey are among those that have signed the agreement, which the government says will become legally enforceable.

It includes a pledge to “act as quickly as possible to fix buildings” and for the firms to “regularly report to leaseholders and government on their progress”.

Developers who refuse to participate – or those that break the agreement – “will face consequences” that could include being blocked from building any more homes, said a statement by the Department for Levelling Up, Housing and Communities.

Buildings will also be fixed if the company responsible can’t be traced, with the cash coming from £3bn expected to be clawed back over a decade via the Building Safety Levy.

It will “ensure no leaseholder in medium-rise buildings faces crippling bills”, the government’s statement said.

The change of approach to give leaseholders more protection was first announced in January by Mr Gove, the housing and levelling up secretary.

“Today marks a significant step towards protecting innocent leaseholders and ensuring those responsible pay to solve the crisis they helped to cause,” said Mr Gove.

“I welcome the move by many of the largest developers to do the right thing.

“But this is just the beginning. We will do whatever it takes to hold industry to account, and under our new measures there will be nowhere to hide.”

But campaigners – who are pushing for an improved Building Safety Bill that protects all leaseholders from fire safety costs – played down today’s announcement.

The UK Cladding Action Group said the developers had currently “signed a non-binding pledge” and that the fire safety crisis was set to drag on for many people.

It wants the government to fund remediation costs itself and then recoup the money later.

The group tweeted: “This is NOT a victory Mr Gove. Not for leaseholders who remain trapped for years as developers wrangle over what to remediate & for how much.

“Govt must fund first, fix now, collect later.”

The Local Government Association, which represents 350 councils, also called for social housing to be fixed “on the same basis as private housing” and for councils to be exempted from the Building Safety Levy.

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