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Leaseholders outraged as government weighs up loans rather than cash for buildings with dangerous cladding
Groups representing thousands of leaseholders across the country have voiced their outrage against plans by the government to offer loans instead of direct grants to those residents facing bills of tens of thousands of pounds to remove dangerous cladding from their buildings.
The government confirmed yesterday to Inside Housing that it was engaging with the Treasury to determine options for loan agreements to support buildings of 11 metres and above that require remediation work.
However, groups representing leaseholders currently caught up in the cladding scandal have described the move as a “slap in the face” and called any plan that would involve loan deals “unacceptable and morally wrong”.
A spokesperson for The Cladiators, the Manchester-based campaign group which represents over 20 buildings wrapped in dangerous cladding systems, said: “A loan system isn’t enough for us, we don’t want to even entertain it as a solution because ultimately it is cost avoidance, not financing that we want.
The group, which has seen some of its members hit with bills of up to £80,000, added: “We shouldn’t be having to pay for the mistakes of developers or building control.”
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Since the Grenfell Tower fire, dangerous cladding and other fire safety defects have been discovered on hundreds of blocks across the country, with leaseholders often being handed the bills for remediation work.
The government has so far put forward £600m towards the removal of the Grenfell-style aluminum composite material (ACM) cladding from social and private residential buildings over 18 metres but has not indicated its plan for non-ACM buildings. Following the creation of the private ACM fund in May, Melanie Dawes, the Ministry of Housing, Communities and Local Government, warned the then housing secretary James Brokenshire that the fund “would not be repeated” for private blocks.
The UK Cladding Action Group, which represents leaseholders embroiled in the cladding scandal outside of Manchester and has campaigned for the widening of the ACM fund, said in a statement: “The loan plan is a slap in the face for leaseholders.
"It is surprising the government is even considering giving loans to leaseholders to pay to fix defects that innocent leaseholders had no hand in creating.
“For it to burden leaseholders who are already fearing for their families’ safety and facing bankruptcy, with further loans, to fix a problem caused by a failure of building regulations, is unacceptable and morally wrong.”
The confirmation that the MHCLG was considering loans came in a government response to calls from housing sector bodies to extend the ACM cladding fund after new government advice earlier this week urged building owners to remove ACM cladding from all buildings regardless of size.
It came as part of a raft of fire safety changes announced by housing secretary Robert Jenrick on Monday, including the immediate creation of a building safety regulator and the lowering of the thresholds for combustible materials and sprinklers to 11m.
Speaking in parliament, Mr Jenrick there were a number of building owners removing cladding or coming up with arrangements to help leaseholders meet those costs such as low cost or zero interest loan schemes.
He added: "If the government can assist in that then I think it should do so, because we want to see the cladding removed as quickly as possible."
Loans to cover the cost of remediation work have been already been offered by several freeholders of affected blocks across the country. In February last year, residents living in New Providence Wharf in Poplar were given the offer of a no-interest bridging loans to help cover bills between £2,000 and £13,000 for each flat.
Last month, Inside Housing reported that residents facing remediation bills of between £15,000 and £25,000, were offered a loan which would see them pay the money interest free over a five-year period.
For one leaseholder, this equated to a monthly payment of £320 a month to cover the loan.
Commenting on these loan payments, the spokesperson for The Cladiators said: “We have seen some of our blocks already given loan deals, and in some cases they are facing £400-a-month bills.
“Where do you find that money from? Do you not eat?”
