"Why should a company that has never installed dangerous cladding, and perhaps never built high rise blocks in the past, be tarred with the same brush and penalised"
Housing Secretary Robert Jenrick today announced a £3.5 billion fund to pay for the removal of unsafe cladding for all leaseholders in high-rise buildings.
The Government will introduce a ‘Gateway 2’ developer levy which will be targeted and apply when developers seek permission to develop certain high-rise buildings in England.
In addition, a new tax will be introduced for the UK residential property development sector, raising at least £2 billion over a decade to help pay for cladding remediation costs.
Jenrick said the tax will "ensure that the largest property developers make a fair contribution to the remediation programme".
Andrew Southern, chairman of property developer Southern Grove, commented: “Taxing developers, most of whom weren’t responsible for the cladding crisis, is just laughable. Why should a company that has never installed dangerous cladding, and perhaps never built high rise blocks in the past, be tarred with the same brush and penalised when they’re no more responsible for this scandal than those in other sectors building cars, running our hospitals and educating our children.
“This sort of regressive tax will only stagnate housebuilding, which is the exact opposite of what the UK needs. By applying it only to the largest developers building the tallest buildings, it will also disincentivise creation of housing in the high density areas that are badly in need of new stock.”
Andrew Montlake, managing director at Coreco, added: “The only way that this intervention is exceptional, is that it’s exceptionally unfair and exceptionally late.
“The Government has turned its back on hundreds of thousands of leaseholders in dangerous buildings less than 18 metres high.
“A dangerous building is a dangerous building and its specific height should not be a deciding factor in whether leaseholders have the remediation works paid in full or not.
"There are also a whole host of associated costs that leaseholders are being asked to pay that cause grievous financial difficulty. Asking people to pay for mistakes they didn’t make is an absolute travesty and one of this Government’s biggest failures yet. When you buy a home, you expect it to have been built safely and should not have to pay a penny if it hasn’t.
“What’s vitally important is that there is a hard deadline in place or there’s a real danger that the cladding scandal, which is causing a huge number of people unbearable levels of stress, will continue to drag on.
“Hundreds of thousands of people are now mortgage prisoners, unable to sell and in some cases facing financial ruin because of this outrage.
"It remains to be seen whether these proposals go far enough to give confidence to valuers and lenders to open up this part of the market once more and allow people to buy and sell without worry.
“Developers have been singled out to help pay for cladding remediation through an ongoing tax, and many outside the industry will see that as a wholly justified course of action. You’ve made your bed, now lie in it.”
