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Government reveals '5bn housing industry agreement to address building safety April 13, 2022

Government reveals '5bn housing industry agreement to address building safety April 13, 2022
Credit: PBC Today


Michael Gove has set a housing industry agreement, which will see developers commit a minimum of '2bn to fix their own buildings, and contribute a further '3bn through an expansion to the'Building Safety bill


Under the new housing industry agreement, over 35 of the UK's biggest homebuilders have pledged to fix all buildings 11 metres+ that they have played a role in developing in the last 30 years.

Gove has stated that there is little time for companies to sign up to the pledge, and those who fail to do so will face consequences.

A new government scheme set out in January will also see the industry pay to fix buildings where those responsible cannot be identified or forced to in law. This follows previous confirmation that plans for a 30-year loan scheme paid for by leaseholders would be scrapped.

The new housing industry agreement will be funded through an extension to the'Building Safety'Levy that will be chargeable on all new residential buildings in England.

This is expected to raise up to an additional estimated '3bn over ten years from developers and ensure no leaseholder in medium-rise buildings faces crippling bills, even when their developer cannot be traced.

'A significant step towards protecting innocent leaseholders'

Levelling Up Secretary, Michael Gove commented: 'Today marks a significant step towards protecting innocent leaseholders and ensuring those responsible pay to solve the crisis they helped to cause.

'I welcome the move by many of the largest developers to do the right thing. But this is just the beginning. We will do whatever it takes to hold industry to account, and under our new measures there will be nowhere to hide.

'The pledge published by government today commits developers who have signed up to legally binding contracts, and to implement their promises as soon as possible.'

Under the new housing industry agreement, developers will:
  • Act as quickly as possible to fix buildings
  • Implement new proportionate guidance on building safety
  • Regularly report to leaseholders and government on their progress
  • Respect an independent dispute resolution process established by government
  • Refund money already received from the taxpayer to fix their buildings.

Should developers break the agreement, there will be new powers enforced, as well as on any remaining companies who fail to sign up. These new powers would allow the Secretary of State to block those who refuse to sign from building and selling new homes.

'Government needs to provide the same protection to council tenants and council taxpayers'

Cllr David Renard, housing spokesperson at the'Local Government Association, which represents 350 councils across England and Wales, commented: 'We are pleased that the Government has listened to calls the LGA has been making for several years to protect leaseholders from the costs of two decades of industry failure.

'However, we call on the government to provide the same protection to council tenants and council taxpayers as it has afforded homeowners, by exempting councils from the developer levy and funding the remediation of social housing on the same basis as private housing.'