The story so far
Building safety has been brought to everyone’s attention following the tragic Grenfell fire in 2017. After the fire, there was a public inquiry resulting in a series of recommendations. This included a key recommendation to inspect buildings to check if the cladding and insulation is safe. We have around 550 properties that need to be inspected, which is a huge amount of work. You can read more about this national problem, what we’ve done about it so far, and the challenges we’ve faced to date, in our recent article – Let’s talk about fire safety.
Who will pay for remedial works?
The building inspections we’re carrying out determine whether remedial work is required. In other words, they inform us about any repairs we need to undertake, to make sure the buildings are in line with fire safety standards and regulations. It is likely that many of our buildings will need remedial works, as is the case for many housing associations. There are some funding options we can explore to pay for any work that needs to be done, but this funding does not apply to all buildings. We will certainly look into every funding option available, as we do not wish to pass costs onto leaseholders and will only do this as a last resort.
The new funding announcement
The government has announced an additional £3.5bn funding for this national problem, plus the cost of a financing scheme to protect leaseholders with financial support, for cladding remediation on buildings between 4 and 6 storeys. The government will also introduce a developer levy for certain high-rise buildings, and a new tax for the UK residential property development sector, to help pay for cladding remediation costs.
Is this good news for leaseholders?
While we welcome the additional funding, there are buildings that will not be covered by the funding options available. We are waiting for further detail about how the funding will work and what it will mean for both our customers and our organisation. As it stands, the funding will only cover the cost of work to cladding for leaseholders and shared owners who live in buildings in excess of 18 metres. Long-term loans will be available to leaseholders in buildings below the 18-metre threshold, with monthly repayments capped at £50. There are some concerns about this creating a two-tier system, with some leaseholders being significantly worse off because their building is slightly below 18 metres.
Why can’t A2Dominion pay?
It is likely that hundreds of buildings within our portfolio will need remediation work, to ensure that they meet the required building safety regulations. This will cost tens of millions of pounds and the pots of funding available will only cover costs for leaseholders. This means it will not apply to the cost of removing cladding from developments where we have tenants and it does not cover the cost of other fire safety work. Unfortunately, we cannot guarantee to cover the full costs of these works for leaseholders ourselves without putting vital services to all our residents – including those in social rented and supported housing – at risk. We also have a responsibility to ensure we can fulfil our commitment to building urgently needed new affordable homes.
We fully appreciate this is a challenging and unprecedented situation for everyone involved and we do not underestimate the impact this is having on our residents living in affected buildings. We are working as part of the G15 group of housing associations and the National Housing Federation to explore all the options for how this crisis can be managed. Collectively, the G15 has been lobbying the government to improve the situation around clarity of guidance and unsticking the mortgage market. This includes requesting more funding to protect leaseholders from expensive bills and ensure that housing associations can continue to invest in new and existing homes and communities. The National Housing Federation has put out a statement about the latest funding announcement and is continuing to lobby the government on behalf of us and the sector. We will share further updates on what the announcement means for A2Dominion, our affected residents, and the sector when the details become clearer.
We understand that you are likely to have many questions about all of this and want to know how it might affect you and your family. We ask you to please be patient with us while we do everything we can to move things forward as quickly as possible. Please be assured that we will provide updates, here on our website, as soon as we have more to tell and will contact you individually when we have information specific to your home and building.
We have a dedicated section on our website about building safety, including frequently asked questions about building surveys and inspections, fire risk assessments, EWS1 certificates, remortgaging and selling, and costs and funding.