Government tells housebuilders to ‘go further’ on cladding costs offer

The government has told housebuilders to go further in their offer to help pay for some fire safety remediation costs if they want to avoid having sanctions forced on them.

On Friday, Stewart Baseley, chair of the Home Builders Federation, set out a suggested offer in a letter to the housing secretary Michael Gove.

Under the terms of the proposed deal, housebuilders will fund remediation on buildings over 11m in height dating back to 2000. They would only fund work on buildings they have developed themselves and only fix issues deemed necessary to fix “critical fire safety issues”.

A spokesperson for the housing ministry said the move represented “progress in our negotiations with the industry” but added: “Developers have not yet gone far enough. They must work with us intensively in the coming weeks to agree a fully funded plan to fix unsafe buildings.

“We have been clear that if they do not, we will impose a solution.”

Baseley said HBF members would also withdraw from using money from the Building Safety Fund to fix blocks over 18m in height.

Where owners of buildings have already applied for funds from the BSF, the housebuilder that built the block will reimburse the fund if the work is critical for fire safety reasons. The HBF believes the resulting extra money in the BSF could then be used to pay for remediation of buildings developed by overseas developers.

The HBF is not at this stage putting a likely figure on the amount of extra money housebuilders will pay to fix cladding costs through the compromise deal. But, as it only applies to buildings developed by the housebuilders and only for fire safety critical issues, it is understood to be substantially less than the £4bn suggested by Gove.

Baseley added: “Only with ongoing support from government and a clear commitment to work with the industry in its broadest sense, including surveyors, building owners, lenders, insurers and product manufactures over the coming weeks can we turn our proposal into a fully practical solution for leaseholders.”

The HBF estimates UK housebuilders will pay £3bn under the residential property development tax from April and not the £2bn as estimated by the Treasury. Baseley said HBF members had already committed or spent £1bn remediating buildings.