A £5bn grant will be set aside to pay to remove unsafe cladding from the highest-risk buildings in the country, funded by a previously announced residential property developer tax (RPDT).
The Chancellor confirmed that around £3bn of that fund would be delivered over the spending review’s period, which will run until 2026.
Rishi Sunak also confirmed that this would be partially funded by a RPDT levied against property developers whose annual profits were over £25m, set at a rate of 4 per cent.
The £5bn cladding fund will be prioritised for “the highest risk buildings”, according to Treasury documents, “to ensure everyone can feel safe and secure in their home”.
The government has also confirmed funding for its housebuilding programme, as it seeks to ‘turn Generation Rent into Generation Buy’.
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A further £1.8bn will be invested as part of the government’s commitment to spend £10bn ‘unlocking’ over a million new homes between now and 2026.
The Chancellor also reconfirmed the planned £11.5bn investment into the Affordable Homes Programme. He said the £7.5bn invested in the spending review period will represent the largest cash investment in housing in a decade.
But the RPDT and cladding fund were first announced by the government in February, and are expected to come into effect in April next year.
Campaigners have also previously raised concerns that the sum set aside to repair flammable materials of blocks of flats is not enough, and that between £10bn and £15bn would likely be needed.
Similarly, the Affordable Homes Programme was first announced in August as part of a wider housing drive.
Analysis of figures released by the Department for Levelling Up, Housing and Communities shows that it will take another three and a half years to remove the cladding from high-rise buildings.
According to the latest government figures, at the end of September 94 per cent of all identified high-rise residential and publicly owned buildings had either completed or started remediation work to remove or replace unsafe aluminium composite material. This is equivalent to around 445 buildings.
Mr Sunak said the plans meant the government was “spending more in housing and home ownership”.
He added: “We’re also confirming £5bn to remove unsafe cladding from the highest risk buildings, partly funded by the Residential Property Developers Tax, which I can confirm will be levied on developers with profits over £25m at a rate of 4 per cent”.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said that a lack of other announcements indicated that the Chancellor was “happy with the way the market is operating at the moment”.
He added: “The £5bn fund is a step in the right direction but nowhere near the sums mentioned as being realistic to resolve the problem.
“A proper assessment of what’s involved is required, as well as enough tools to do the job in terms of engineers and surveyors and robust checking. Why should anyone be stuck in something un-mortgageable, particularly those blocks with very limited amounts of cladding?”
Myron Jobson, personal finance campaigner at interactive investor, said: “Many faced being saddled with huge cost for remedial works or fire patrols to address a problem that was not of their making.
“Thousands of people trying to sell flats in clad blocks have discovered that there is little to no interest in their property because of the crisis – and even if a buyer is found, some mortgage providers have view flats with claddings unfavourably.
“It is only fair that those responsible for the crisis, which came to prominence with the tragedy at Grenfell Tower in 2017, should be made to pay their fair share. Some may argue that more money is needed to fully address the issue.”Internet Explorer Channel Network