Thousands of leaseholders trapped by the cladding scandal will not have to pay a penny to get their properties made safe under a scheme drawn up by Michael Gove.
The Housing Secretary will unveil plans next week for a £4billion grant scheme to pay for repairs demanded by banks and insurers in the wake of the Grenfell fire.
It will directly help those living in buildings under 18 metres tall who have missed out on previous grants and been told to take out huge loans to remove dangerous cladding.
At least 116,000 flats in 7,500 blocks are expected to benefit from the plan.
The Housing Secretary will unveil plans next week for a £4billion grant scheme to pay for repairs demanded by banks and insurers in the wake of the Grenfell fire (above)
Mr Gove will warn developers that they will be expected to pay for the scheme.
They will be asked initially to make voluntary contributions but warned that they face the prospect of swingeing new levies if they refuse.
They will also be banned by law from passing on the bill to leaseholders through inflated service charges.
A Whitehall source said: ‘It will take a little while to sort out but it should give people in these properties the confidence and security that the work will be done and that they will not have to borrow the money to pay for it.’
The move represents a major victory for the Daily Mail, which has campaigned for justice for the thousands of people facing huge bills to remove dangerous cladding and fix other fire risks.
Many have found they are unable to sell their homes because banks have been unwilling to offer mortgages.
The scheme, drawn up by Michael Gove, will directly help those living in buildings under 18 metres tall who have missed out on previous grants and been told to take out huge loans to remove dangerous cladding. At least 116,000 flats in 7,500 blocks are expected to benefit from the plan
Mr Gove will also announce a review of the scale of the work required, following concerns that it has been inflated.
All unsafe cladding will be removed but officials believe that the overall bill has been inflated by demands to fix other building problems that do not directly affect safety.
Ministers are understood to have reached agreement with lenders on the issue in recent weeks.
A Whitehall source said: ‘We want a proportionate approach to fire safety. There has been some over-reach on buildings that are essentially safe, so we are going to look at that.’
A report by Capital Economics last year found that up to 1.3 million flats may be ineligible for a mortgage because of concerns about unsafe cladding.
People living in properties above 18 metres are already able to access Government grants from a £5billion Building Safety Fund.
But the former housing secretary Robert Jenrick had proposed a loan scheme for those living in properties standing 11-18 metres tall despite warnings it would cost £300million to administer and leave leaseholders saddled with debt for years.
Under the new proposal, people living in these buildings will also be able to access Government grants to pay for vital fire safety work.
The average post-Grenfell repair bill for properties above 18 metres is £59,000.
Those in properties with a height of 11-18 metres have faced bills averaging £27,000.
Some have faced demands for six-figure sums for remedial work, plunging many into debt and despair.
Mr Gove, who took over responsibility for the crisis after the Government reshuffle in September, had already indicated he was unhappy with the idea that ‘innocent’ leaseholders should have to pay for building defects.
He told MPs last year: ‘I’m still unhappy with the principle of leaseholders having to pay at all, no matter how effective a scheme might be in capping their costs or not hitting them too hard at any one time. My question is why do they have to pay at all?’
Mr Gove has also savaged developers and building firms that have continued to make huge profits in the wake of the Grenfell tragedy.
A dossier compiled by the Department for Levelling Up, Housing and Communities last month found that companies involved in the Grenfell fire have gone on to make huge profits since the June 2017 disaster which claimed 72 lives.
The dossier, obtained by the Mail, found that 12 firms connected to the west London fire have since made pre-tax profits of £6.7billion, paid out dividends of £3.1billion and awarded pay packages and bonuses to directors worth £335million.
Speaking to MPs last year, Mr Gove made clear his view that the private sector should foot the bill, adding: ‘We have a responsibility to relieve some of the obligations faced by leaseholders, who are innocent parties in this and who are being in many circumstances asked to pay disproportionate sums when there are individuals in business who are guilty men and women.’
A spokesman for the Department for Levelling Up said last night: ‘We don’t comment on speculation.
‘The Secretary of State will set out further detail on our approach to building safety next week.’
Spared bills of £40k each… thanks to Mail ‘shaming’ developers
By MILES DILWORTH for the Daily Mail
Elated leaseholders have hailed the Daily Mail for ‘shaming’ their developer into paying to replace dangerous cladding on their building.
More than a hundred residents at The Decks, a six-building development in Runcorn, Cheshire, are set to be spared bills of up to £40,000 each.
Families say they feel liberated by the news and can now start planning their lives again.
In February, the Mail reported leaseholders in three of the blocks at The Decks faced crippling bills to replace flammable cladding in their flats, while those in the other three wouldn’t have to pay a penny.
More than a hundred residents at The Decks, a six-building development in Runcorn, Cheshire, are set to be spared bills of up to £40,000 each
The divide came about after the Government announced its beefed-up cladding fund would only be available to those living in buildings above 18 metres tall.
It meant half the blocks at The Decks would not qualify for funding despite being just one storey shorter than the others.
But just weeks after the Mail highlighted the injustice, developer Taylor Wimpey pledged £125million to fix fire-trap flats it had built in the past 20 years.
And last month leaseholders received an email from their managing agent stating: ‘We are confident the developer will fund Lock 6, 7 and 8 [the smaller blocks] in full.’
Resident and campaigner Julie Fraser (above), 58, had said in February the developer should ‘hold their hands up’ and cover the costs
Leaseholder Phillip Symes said it was the ‘best Christmas present ever’. The retired sailor, 72, had been facing a bill worth half of the £80,000 he had paid for his two-bed flat.
He said the news Taylor Wimpey is set to fund the work was a ‘massive relief’ and he could now afford to visit his son and grandchildren in New Zealand.
He added: ‘I think Taylor Wimpey was shamed into it by the coverage. We can’t thank the Mail enough for its campaign.’
But Mr Symes said leaseholders still faced soaring insurance costs, which would not be rectified until their buildings were made safe.
Their premiums have soared by 1,000 per cent since 2019 due to safety fears. The company is yet to set a timetable for work to be completed.
Resident and campaigner Julie Fraser, 58, had said in February the developer should ‘hold their hands up’ and cover the costs.
She added: ‘We, as leaseholders, didn’t create the problems… the developers are the ones with the deep pockets.’
A Taylor Wimpey spokesman said: ‘We have always been guided by the principle that the safety of our customers is of paramount importance.
‘Further updates will be provided to residents as soon as possible.’
Source: Daily Mail UK