Owners of mid-rise flats with dangerous cladding will no longer have to pay to have it removed from their homes.
The costs will now be passed on to developers and cladding manufacturers, according to the government.
Michael Gove, secretary of state for Levelling Up, Housing and Communities, published his letter to the building industry on January 10.
In it, he requested that companies and industry bodies work together with the government on a “new deal” to fix the cladding crisis.
They have until early March to agree on a plan to fund and fix unsafe cladding on buildings of around four to six-storeys high.
The estimated cost of work to fix cladding on these buildings is £4bn.
The government is paying for cladding to be replaced on blocks of flats that are above 18m high.
However, buildings of 11m to 18m have not been eligible for government support.
Several major developers have already stepped up and taken on the responsibility for changing unsafe cladding themselves.
Gove is now asking all developers to do the same, so that leaseholders are no longer left with large bills to resolve the crisis.
He has also scrapped an earlier government plan under which leaseholders would have had to take out low interest government loans to pay to fix cladding.
Gove vowed to work with developers and trade bodies to find a solution. But he warned that if the industry didn’t take responsibility, the government would take further action.
Why does £4bn need to be paid to fix cladding?
In June 2017, 72 people died and more than two hundred residents lost their homes in the Grenfell Tower fire in London.
Unsafe cladding and external insulation was later found to have played a part in how quickly the deadly fire spread.
In the wake of the Grenfell tragedy, flammable cladding and other fire safety defects were discovered in hundreds of tower blocks across the UK.
As a result, the government announced plans to remove highly flammable cladding from apartment buildings.
While the government offered support to those living in apartments over 18m high, leaseholders living in flats below 18m were asked to foot the bill themselves, with the help of government-backed loans.
Homeowners in mid-rise properties complained that the situation was highly unfair, particularly as it made their properties unsaleable.
What does Gove’s letter mean for leaseholders?
Gove’s announcement is good news for leaseholders in mid-rise apartment blocks.
Not only will they no longer have to worry about paying to have the cladding removed, they’ll now be able to sell should they wish to.
Some leasehold properties became effectively unsellable due to the discovery of flammable cladding.
Many such homes were down valued by the bank, and became unmortgageable.
The latest announcement means homes in mid-rise blocks with cladding may soon re-enter the housing market.
This is also good news for the wider property market, as there is currently a shortage of available homes for sale.
Under Gove’s new proposals, leaseholders will also be protected from losing their homes due to historic fire safety costs.
Some residents have spent years paying for onsite fire safety wardens, known as “waking watch”, because their buildings are unsafe.
Those unable to afford these costs could have faced eviction, but Gove’s announcement includes further protections for them.
New statutory protections for leaseholders are also due to be introduced within the Building Safety Bill.
This will give leaseholders a legal right to demand compensation from their building’s developer for safety defects that were up to 30 years old.
What does the cladding news mean for developers?
In his letter, Gove announced new measures to hold developers accountable for shouldering the cost of cladding remediation.
He acknowledged that many developers had already covered the cost of remediation work to their buildings without complaint.
But he warned that housebuilders that didn’t would face commercial consequences.
He said a team would be established to pursue and expose companies that were at fault and make them fix the homes they had built.
What’s it like living in a home with unsafe cladding?
Jenni, 24, lives in Sheffield in a two-bedroom flat that currently has a market value of £0. Unsafe cladding was discovered after she moved in.