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Gove’s cladding plans instill confidence in housing market – Rudolf

by: Beth Rudolf, director of delivery at the Conveyancing Association (CA)
  • 15/11/2021
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Gove’s cladding plans instill confidence in housing market – Rudolf
Last month I wrote about what a difference a new minister – and indeed department – would make to the housing market, particularly given the fact the new secretary of state at the new department for Levelling Up, Housing and Communities (DLUHC) is Michael Gove.


Evidence of that difference has not taken long to appear with the news that Gove is apparently rethinking the government’s approach to the cladding crisis, is about to withdraw its own consolidated advice note on low-rise buildings, and is pausing plans for leaseholders in those very same buildings to have to enter into loan schemes in order to pay for any remedial work required. 

This was all announced at his recent appearance in front of the Housing, Communities and Local Government select committee, and is perhaps a sign that measures and announcements already made – under a different minister – might not survive in this new environment. 

What will undoubtedly please leaseholders involved in this long fight to sort out the cladding mess is the fact Gove wondered out loud why they should be having to pay anything at all, when the problems were nothing to do with them. 

Instead, as was outlined in the Budget, it will be a tax on developers’ profits that has been earmarked to fund these necessary changes to ‘at risk’ buildings Although critics have already pointed out the £2bn this tax is likely to raise over the next 10 years is not going to be enough to fund the cladding work required. 

Which, if correct, seems to get us back to the same question – who will fund the shortfall? At present leaseholders themselves are being expected to pay their share but, again as Gove said, why should that be the case?

It will be interesting to see how he intends to square that particular circle. 


Leasehold concerns 

There is a clear mortgage market issue which of course still needs addressing here and that is the certainty – or perhaps lack of it – that exists for leaseholders in terms of how viable their property is for sale, or indeed, to be mortgaged. 

Understandably, lenders have been less than willing to lend on properties which might ultimately end up costing their owners thousands of pounds to sort out the cladding problem. Especially if they are of a certain height and – as it stands – they are not eligible for government grants. 

However, this can’t be an issue that goes on for ever and ever. Because as I’m sure you’re all fully aware, there are literally thousands of people currently stuck in mortgage and leasehold limbo, fearful that their property is now deemed worthless but with no clear pathway out of this situation, unless the government intervenes. 

In July, the government categorically said there was ‘no systemic risk of fire’ to blocks of flats under 18 metres. However, its consolidated advice note is still active and as a result lenders have not felt able to change their risk appetite on these properties. 

They have however worked with the Fire Industry Association to create a Building Safety Information Portal – – to help stakeholders establish whether an ESW1 has been submitted for a property. Of course, height is not the only reason an EWS1 would not be required, as the government previously did state brick-built external walls as safe and, further clarity indicating whether costly works will be required from DLUHC can only help lenders, valuers and conveyancers in providing the correct advice to consumers. 

With the news from Gove that he will be withdrawing the note ‘before Christmas’, we might be able to give more mortgage-related certainty to those currently living in such properties who have effectively been made mortgage prisoners by recent events. That would indeed be welcome. 

No one is underestimating the size of the task facing the DLUHC and the new secretary of state here, but if a resolution could be found relatively quickly, it would send a clear message that these issues are not insurmountable and would give fresh hope to so many leaseholders who have found themselves in this position through no fault of their own. 

It would also suggest Gove is living up to his reputation for ‘getting things done’ and we can perhaps look anew at other areas which require this go-getting approach, most notably speeding up the home buying and selling process which will undoubtedly benefit all stakeholders.  

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