We welcome the Secretary of State’s statement to the House of Commons on 10 January 2022 and believe his commitments are a significant step in the right direction, in addressing the building safety crisis.
We know this is an extremely worrying and upsetting time for our customers, particularly leaseholders and shared owners, who fear for their financial futures and the security of their homes. We’re particularly pleased that Government:
- Has committed to putting the safety of residents at the heart of policy and legislation on building safety
- Intends to source an extra £4bn of funding from developers for the removal of dangerous cladding on buildings between 11m and 18m; and to pursue those responsible for defects
- Has committed to accelerating the apportionment of funding to remediate unsafe buildings
- Is demanding a more proportionate approach to assessing building safety risk so leaseholders aren’t unfairly affected by overcautious assessments
- Plans to use the forthcoming Building Safety Bill to protect leaseholders from the costs of remediation and mitigation of fire risks
- Is changing the rules around grant funding that will mean leaseholders living in buildings waiting for an EWS1 form will be able to sublet their home. We have already updated our policy on subletting.
We believe people are entitled to feel, and to be, safe in their homes, without fear of financial ruin. Which is why we wholeheartedly support the Government’s principle that ‘the polluter should pay’ and that leaseholders shouldn’t foot the bill for a crisis that is not of their doing.
We’ve spent more than £70m removing and replacing dangerous cladding in our tallest buildings, and rectifying internal safety issues we’ve found, since the Grenfell Tragedy in 2017.
To date, we’ve not passed on any costs to leaseholders for major fire remediation works, nor have we passed on any costs for mitigation measures, such as waking watch and temporary fire alarm installation.
However, as a charity and not-for-profit organisation, we must follow the rules about how we use charitable funds (money and grants we get to do something specific), which limit our discretion to pay for building safety works on behalf of leaseholders.
That’s why we’re grateful Government has made billions of pounds of funding available, in the form of the Building Safety Fund and the Waking Watch Relief Fund. We welcome the news that more money will be forthcoming, to help prevent us from having to pass on any costs to leaseholders.
We’re also working with the original developers and contractors of some of our buildings to agree remedial works that will be carried out at their cost. We’ve always been clear: we won’t hesitate to take legal action against those responsible for building defects; we’ve already had significant success in this regard.
At every step of the way, we’ve worked to fulfil our legal obligations as a building owner, head lessee and landlord, following the guidance of fire safety experts, the National Fire Chiefs’ Council and the Fire Service, to ensure residents are safe in their homes, while we deal with any issues we’ve found.
In his letter of 10 January to the G15 (the group of London's largest housing associations, of which Hyde is a member), the Secretary of State committed to taking account of the ‘unique position of registered providers of social housing’. He also recognises that some registered providers face significant building safety cost liabilities in respect of their rented homes, and are having to balance budgets to support this.
We welcome the opportunity to work with Government to help solve this crisis and to protect all of our customers. In particular, we’ll be seeking clarity from the Secretary of State on a number of points:
- The type of works covered under the new proposals. We understand Government funding will only cover cladding replacement and won’t cover other necessary fire safety remediation work in buildings where cladding doesn’t need to be replaced. Our experience is that cladding replacement typically only accounts for about 45% of the total cost of fire safety remediation projects.
- How Government proposes to accelerate the allocation of money from the Building Safety Fund, so that work can be carried out as soon as possible.
- If Government plans to pay ‘up front’ for remedial work, should demands for funding from developers (and others in the construction industry) result in lengthy legal action, and how this might affect the social housing funding.
- What Government meant by protecting leaseholders from the ‘bulk of the cost’ of remediating and mitigating fire risk in the Building Safety Bill, in its letter to G15 members and whether it will change its Building Safety Fund rules and draft Building Safety Bill provisions that currently require housing associations to charge leaseholders.
- Given current Charity Commission and Government funding rules constraining housing associations’ ability to pay for work on behalf of leaseholders, we need to understand what ‘backstop’ will be in place to pay for building safety work, if a developer can’t (or won’t) pay (or if it no longer exists).
- How and when the Government will implement the measures it has announced to amend grant funding guidance, so that building safety costs can be considered ‘exceptional’ circumstances for the purposes of allowing shared owners to sublet their properties.
- The Government has stated that the housing industry should prioritise ‘safety before supply’. We want to understand how Government will help ensure housing associations can continue to build the homes the country desperately needs, while paying for building safety works and meeting net zero targets. This is already having a significant impact on the number of homes being built.
- If Government will work with the National Fire Chiefs’ Council and the Fire Service to change guidance requiring waking watch to be maintained, even when fire alarms are installed, and if it intends to bring in legislation, if necessary.
- If Government will give housing associations access to the additional £27m allocated to the Waking Watch Relief Fund to pay for temporary fire alarm installations. Our applications to the fund were rejected because we haven’t billed leaseholders for this, or for waking watch.
- How Government proposes to enforce a more proportionate approach to assessing fire safety risk. We welcome the withdrawal of the Consolidated Advice Note and the publication of PAS 9980, along with Government’s proposed indemnity scheme for assessors, however this is no guarantee that assessors will change the way they assessing building safety risk. PAS 9980 is not intended as an alternative to the EWS1 form, which is for valuation purposes and is administered by RICS. We expect our experts to be professional and err on the side of caution when it comes to ensuring the safety of our customers.
- How Government proposes to work with RICS on EWS1 forms. We’ll continue to rely on fire risk assessments and external wall surveys, completed by suitably qualified fire experts, to evidence the safety of our buildings. We don’t support the use of EWS1 forms to assess building safety; we believe lenders should accept the documents landlords must provide to comply with fire regulations, good practice and legislation. We’ll only obtain EWS1 forms once we’re happy we’ve met all our statutory duties, with the cost of surveys charged in accordance with our leasehold charge obligations.
This crisis has gone on for far too long and it isn’t right that thousands of people are caught up in a situation that is not of their doing. We share the frustration and worry of our customers. We hope that together, Government, the housing sector and the entire construction industry can resolve these issues, so that people can feel safe in their homes and get on with their lives.