A £200 million fund to remove Grenfell cladding from private blocks was announced this morning by Communities Secretary James Brokenshire on the BBCR4 Today programme.
This action has been long predicted by LKP, believing that ministers’ appeals to freeholders and developers to “do the decent thing” – whatever that means – would not work.
The announcement of the £200 million is here:
Government to fund and speed up vital cladding replacement
The government will fully fund the replacement of unsafe aluminium composite material (ACM) cladding on high-rise private residential properties where building owners have failed to do so Communities Secretary the Rt Hon James Brokenshire MP calls time on “reckless” building owners who have refused to take action New funding estimated at £200 million to ensure this work takes place urgently The government has stepped in to speed up vital cladding replacement by fully funding the work, eliminating excuses used by some building owners and protecting leaseholders from the costs.
LKP congratulates the Communities Secretary for his decision.
Sir Peter Bottomley and Jim Fitzpatrick, the MP patrons of LKP, said:
“Officers of the APPG welcome this positive announcement by the Prime Minister and the Communities Secretary.
“We thank the Leasehold Knowledge Partnership and the UK Cladding Action Group for early identification of the perilous situation of private leaseholders in high rise buildings.
“The APPG meeting for private leaseholders last night at the House of Commons illustrated the crippling fearful position of thousands of ordinary people worried about physical safety and financial burdens.
“Our call for effective action is being met. We offer to help make it work fairly and fast.”
For two years ministers had been urging developers and freeholders to “do the decent thing” and pay themselves for the cladding removal.
This had some success with developers, and their warranty providers, but none at all with speculators in residential freeholds.
Some sites were built 20 years ago and in many cases the builder has long gone bust.
The new fund is for private blocks and ACM cladding removal only.
The announcement came hours after LKP / APPG on leasehold and commonhold reform held a packed public meeting at Westminster to address this issue.
Housing minister Kit Malthouse pulled out of the meeting with a few hours notice, not meeting leaseholders who had travelled from as far as Manchester to attend.
Shadow Housing Minister Sarah Jones addressed the meeting, as did Sue Bright, an Oxford professor of law, who has been concerned about this issue for months, and Suzanne Richards, a Manchester councillor
Mr Brokenshire said that sites where developers and insurers have undertaken to pay to remove cladding will continue to be paid for by these commercial operators.
No speculators in residential freeholds have undertaken to contribute
The government announcement includes the very small ground rent investors Pemberstone (£75,000 in revenues) as paying up, but in fact the Manchester Green Quarter sites are being sorted by the builder, the Aussie giant Lendlease.
Lendlease caves in over £5m Grenfell cladding bills at Vallea Court and Cypress Place
Legal and General is paying at the Blenheim Centre / Reflexion site in Hounslow, but it also owns the shopping centre below the flats: it agreed to pick up the £12 million bill after prompting by LKP.
Mr Brokenshire said he was making the decision because of the time taken since the Grenfell disaster to deal with the cladding crisis.
This has caused appalling anguish and mental illness among leaseholder residents, whose lives have been on hold since their buildings were identified with the cladding.
The scale of this was made clear at last night’s meeting of over 100 leaseholders, 12 MPs and national media journalists at the LKP / APPG event.
The purpose was to provide a “cladding forum” and to support the brilliant campaign by the newspaper Inside Housing. Ostensibly this covers social housing and housing association issues, but it has made the running over Grenfell cladding issues.
A concern expressed is that many sites have been built with defective cladding or inadequate fire breaks, which may not be ACM / Grenfell cladding and therefore ineligible for government funding.
Many of the leaseholders who attended have freeholders based in assorted tax havens where the ultimate beneficial ownership – of entities such as Adriatic Land – are completely secret.
This means these vital decisions over their lives are made by private equity investors who are completely anonymous.
Is it enough? Is it a loan?
Questions remain about the details of this £200 million.
The first is: who gets the money? The freeholder or the leaseholders? It presumably has to be the freeholder as it is his building.
Is the money a loan? This is unclear. There is an obligation to try to recover costs from whoever put the cladding up. But how far does this go?
What about sites where leaseholders have already paid out, such as Paddington Walk?
Paddington Walk leaseholders have paid £3.5m to remove Grenfell cladding, with more to come …
Is it enough? There are 167 blocks. One barrister dealing with three sites says they account for 10% of the allocation.
Analysis here:
Cladding and the private sector: a good first step – Nearly Legal: Housing Law News and Comment
There have been rumours of this for a while now, but in the last few mins (9.5.19, 8.30am) the government has announced that it will make public funds available to help fund private sector cladding remediation works. The details (such as they are) are here. A few immediate thoughts: 1) This is very, very welcome.
Related posts:
Leaseholders in local authority and housing association blocks will have Grenfell cladding bill paid by government
Brokenshire tells freeholders to pay up to remove Grenfell cladding. But how can that work?
Grenfell cladding leaseholders form campaign group
Campaign to get government to help fund Grenfell cladding removal
Brokenshire wrongly says freeholders have paid for Grenfell cladding removal
Here’s the National Leasehold Campaign pledge, after the government panders to the sector over its PR piffle emitted last month
Nice to know the tax paying public are going to pick the bill up for non tax paying off-shore freeholders!
Indeed, nice present if you can get it. I would just take a freehold off as clearly value of it is 0.
Sir Peter Bottomly has again asked Parliament for both Sebastian & Martin to be thanked for their input into Leasehold Exploitation.
At the same time, I would like to thank Michael Epstein for his momentous continual input which I have been aware of, for at least 7 years. His help on websites such as TTAS – Peverel Action and About Firstport has been phenomenal.
But again Freeholders, like the Bankers, rely on us Tax-Payers to bail them out, providing them with compensation. James Brokensahaw informed parliament today that the Leaseholders were legally responsible for the replacement according to their Leases, surely these Leases are open to Unfair Contract Terms within many Leases?
There are 433 other similar Developments and 1700 others Non-ACM will they be made safe and who pays for them.
In Birmingham there are 213 Tower Blocks with 10,000 householders, why have they not been helped?
Given how scammy long leasehold law is designed, nobody but leaseholders were in the frame for what is a failure of regulatory control. Freeholders own a reversionary interest in blocks.
Why does nobody never not notice the ‘reversionary’ bit of that ownership? If they own the buildings now, how come they don’t pay market value for the buildings and cannot borrow against the asset and pay no running costs? They own the freehold title.
It is all legal smoke and mirrors. Only the ‘Empire’ could get away with designing it.
Don’t governments have liability insurance for being utterly useless?
Paddy,
Some of us are aware of the Freeholder having as you put it, a ‘Reversionary’ bit of that ownership?
If they haven’t sold off the Freehold, they own the buildings outright and as you say they don’t pay market value for the buildings and cannot borrow against the asset and pay no running costs?
Remember that Peppercorn Ground Rents were to have “No Monetary Value” according to a Leading QC, yet, Ground Rent Grazers, pay about 2 to 5% of the value of a development and then receive the GR for the next 90 years plus in some circumstances, and is an asset that has value and can be borrowed against.
It has always been legal smoke and mirrors, the way the hierarchy keeps its worth by allowing pheasant s to work for them, charging rent to be on their land, and work for them.
Only England & Wales continue Leasehold, says more about them.
Inside Housing Peter Apps 17/05/2019 (Precis)
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Pressure mounts on Ministers to commit to funding non-ACM cladding removal The government is under pressure from experts and residents to remove High-Pressure Laminate (HPL) Cladding. This cladding is known to have already failed fire tests and been linked to deadly tower block fires.
Last week Housing Secretary James Brokenshire announced £200m to remediate private sector blocks with aluminium composite material (ACM) cladding, taking the total committed for ACM removal to £600m. But there remains no government money, and no formal process of identification, for other dangerous cladding systems – some two years on from the Grenfell Tower fire.
Mr Sam Webb, Architect, Safety Campaigner and member of research group Tower Blocks UK, wrote in an article for Inside Housing:
“ACM is just one of several cladding materials known to conduct the spread of flame. If the government are serious about avoiding another preventable tragedy like Grenfell, then it must immediately fund the removal of all forms of dangerous cladding.”
The government is not doing enough to prevent another tragedy in a high-rise tower. In particular, Mr Webb drew attention to (HPL) Cladding – which was used to make the window panels that helped the deadly Lakanal House fire to spread in 2009. Following this fire, the panels were tested by the Building Research Establishment (BRE) and the Metropolitan Police, where they burned through in just four-and-a-half minutes.
A previous test that combined HPL panels with Kingspan insulation in a rain-screen cladding system was tested by the BRE in 2005, at the request of Kingspan. That 45-minute test saw flames rip through the cladding system and the fire reach temperatures of 925°C. Flames climbed three metres up the cladding in just five minutes, burning materials fell to the ground and the rain-screen panels began to collapse from 18 minutes.
However, the government still believes it is necessary to carry out further tests before deciding whether HPL is dangerous possibly in September 2017.
This cladding removal fund should be paid by a 40 % tax rate on all ground rent income and there shall be no deduction of loan interest. It should not be paid by the taxpayer.
The freeholder companies and controlling company which have refused to fund the cost of replacing the cladding shall be placed into bankruptcy and the freehold title shall be taken into state ownership and turned into blocks of commonhold .
The directors of the bankrupt ground rent companies shall be disqualified from becoming director of any UK Company for 14 years . These persons will not be qualified manage any blocks of flats. or act as insurance intermediaries for 14 years.