The government has set up a regulator to oversee the UK’s cladding safety regime which was introduced after the Grenfell Tower fire in 2017.
Called the Building Safety Regulator, the new body is designed to protect residents and landlords by acting as a vehicle to prosecute property developers which fail to meet the government’s cladding safety standards.
This regulator forms part of the Building Safety bill, which was published today (July 5) and announced by housing secretary Robert Jenrick.
The bill will ensure “safety risks are considered at the earliest stage of the planning process”, according to the Ministry of Housing, Communities & Local Government (MHCLG).
It aims to create “a ‘golden thread’ of information” which is “stored and updated throughout the building’s lifecycle, establishing clear obligations on owners”.
The bill also provides a legal requirement for building owners to evidence that they explored alternative ways to meet remediation costs, before passing them on to leaseholders.
For now, the new regulator overseeing this bill will only govern buildings which are at least 18 metres tall, with the government having already promised a £5bn fund to remove their cladding.
A further £3.5bn government-backed financing arrangement was announced in February for buildings between 11 and 18 metres, but no details have been released on how leaseholders will receive these funds.
“The reforms will tackle bad practice head on,” MHCLG said in a statement.
Longer compensation periods
Under the proposals, residents can now seek compensation for substandard construction work over a 15-year, rather than a six-year, period.
This will apply retrospectively, meaning that residents of a building completed in 2010 will be able to bring proceedings against the developer until 2025.
Developers will need to join and remain members of the New Homes Ombudsman scheme so homebuyers can receive redress where necessary.
Lord Greenhalgh, minister for building and fire safety, said that whilst “the overall risk of fire across all buildings remains low”, the UK “can’t be complacent”.
He continued: “The more robust regime will take a proportionate and risk-based approach to remediation and other safety risks.”
Some lenders have highlighted the disproportionate approaches some of their peers are having to take following the government’s cladding safety regime.
Nationwide’s head of property risk, Rob Stevens, told FTAdviser last month: “Post-Grenfell, everyone was very nervous, which may have led to overcautious risk assessments.”
He said at Nationwide, the bank was trying to avoid “put[ting] unnecessary burdens on flat owners and leaseholders” as a result, by taking a building-by-building approach.
The lack of a government-led solution for buildings under 18 meters has also played a part in lenders’ conservative risk appetite for borrowers and leaseholders.
“We still don’t know what the details are for five and six-storey buildings,” said Stevens, who added the industry was under no illusion that funding for these buildings was “imminent”.
For those looking to remortgage or borrow against a house or flat with potentially unsafe cladding, or borrowers looking to invest in such a property, “it’s very difficult [for lenders] to make an assessment on affordability”, Stevens explained.