Mortgages  

Govt mulls cladding proposal to ‘unlock’ mortgage prisoners

“The top 10 builders made £31bn over the last 10 years,” said Day, based on his calculations from their financial reports. 

“They have also distributed optional dividends of £12bn over this time. And they have land banks which they could sell off as assets. They can clearly afford it.”

FTAdviser approached the Home Builders Federation, the trade body which represents developers but it did not provide comment at time of publication.

New public body

The bill proposes the government set up a public body to oversee the calculations and draw up payment plans. On the leaseholder side, it suggests a ‘responsible person’ - ie building owner - will liaise with the public body.

Money would be paid to the leaseholders directly by the government up front via this public body to cover the remediation initially so it can begin. Then over time, the government can use the Polluter Pays Bill scheme to recoup the money.

“I know that this matter has been brought to the attention of the government,” the Earl of Lytton said in July. “My question is: when is the government going to act on it?”

The amendment has already been tabled twice in parliament in different forms. Once in the House of Commons by Conservative MP Liam Fox, who garnered the support of 14 backbenchers to bring the Polluter Pays Bill into the Fire Safety Bill now the Fire Safety Act. 

Then once in the House of Lords by the Bishop of Manchester, supported by Bishops of London and St Albans, and the Earl of Lytton, as an amendment to a private members bill. 

The bill is based on the laws already in place for contaminated land, according to Day. “So this amendment isn’t re-inventing the wheel,” he said.

“It’s also less complicated than contaminated land, which spans 150 years, versus cladding, which spans just 20-30 years. These laws have already saved homeowners thousands of pounds.”

Need for a framework

Day is a leaseholder in Royal Artillery Quays, a building potentially facing a £13m bill for cladding remediation. Some 63 per cent of its leaseholders said they would be made bankrupt if this bill was enforced, according to an online poll. 

The Earl of Lytton, a chartered surveyor as well as a peer in the House of Lords, said in an email seen by FTAdviser: “The main blame must fall on those who cut the corners, namely those associated with the actual construction process. But there are many players and establishing liability will take time. 

“The Polluter Pays Bill would afford a framework in which the government necessarily drives the process but responsibilities for not meeting regulatory requirements will ultimately lie with those actually responsible for defective work.”