Plan to impose loans on cladding victims must be scrapped, MPs say

Plans to impose loans on cladding victims should be scrapped in favour of a major new fund, MPs have said.

Government schemes to help hundreds of thousands of leaseholders facing crippling bills to fix unsafe homes ‘do not go far enough’, according to a report published by the housing committee today.

It warns that the crisis threatens the entire housing market but that ministers are putting ‘certainty for lenders above fairness for leaseholders’.

The assessment piles more pressure on Housing Secretary Robert Jenrick after 30 Tory MPs rebelled against his plans in a Commons vote on Tuesday.

More than a million private flats are thought to be affected by safety defects identified in the wake of the Grenfell fire in 2017 which claimed 72 lives.

The Government has made a series of interventions since the Mail launched its campaign to end the scandal in January.

In February, Mr Jenrick more than trebled taxpayer funding to £5.1billion. But the cash is available only to those living in buildings above 18 metres (60ft) with unsafe cladding.

While the Government has announced a loans scheme for smaller buildings, it means hundreds of thousands of leaseholders could be forced to take out loans of up to £600 a year to pay for repairs.

Meanwhile, there is no funding for those facing average bills of £25,600 each to fix non-cladding related defects identified during checks such as missing fire breaks. MPs estimate the total bill to fix all dangerous buildings could be around £15billion. The housing committee also wants the fund expanded so it covers blocks of all heights with any fire safety defects.

Labour MP and committee chairman Clive Betts said the current fund would ‘be swamped by the sheer scale of fire safety issues’. He said the Government’s plans ‘fail to adhere to the fundamental principle that leaseholders should not have to pay to fix these problems’ and that the loan scheme must be ‘abandoned’.

Mr Jenrick has also announced a new developer tax will raise an estimated £2billion for cladding remediation over a decade, as well as a levy on new high-rise blocks that will be worth an as-yet-unknown amount.

But it is thought these measures will be used to claw back the Government’s own outlay, leaving leaseholders still liable for at least £10billion. It comes as house builder Persimmon yesterday said sales had hit £3billion in the opening months of 2021 which is 23 per cent up on last year.

The developer has set aside £75million to fix 26 unsafe sites, but the Mail has previously revealed that this may cover only around 72 per cent of the estimated £104million bill to repair these blocks. It said it will ‘pay for their contribution to any necessary work’.

A Ministry of Housing, Communities and Local Government spokesman said the housing committee report is ‘deeply flawed’ and that ‘owners and industry should make buildings safe without passing on costs to leaseholders’.