The government will allocate an extra £3.5bn to remove unsafe cladding from high-rise buildings over 18 metres high.
Owners of flats in lower-rise blocks will be provided with loans to deal with unsafe cladding, with payments being capped at £50 a month.
There will be a levy on developers of future high-rises to pay for these loans, while there will be a separate tax on residential property development in 2022.
Housing Secretary Robert Jenrick said: “This is a comprehensive plan to remove unsafe cladding, support leaseholders, restore confidence to this part of the housing market and ensure this situation never arises again.
“Our unprecedented intervention means the hundreds of thousands of leaseholders who live in higher-rise buildings will now pay nothing towards the cost of removing unsafe cladding.
“Remedying the failures of building safety cannot just be a responsibility for taxpayers. That is why we will also be introducing a levy and tax on developers to contribute to righting the wrongs of the past.”
But not everyone is convinced the £3.5bn goes far enough.
Sadiq Khan, Mayor of London, said: “These proposals fall far short of what is needed. It is shameful for ministers to tell some leaseholders that they will have to pay to fix building safety problems they played no part in causing.
“Three and a half years after the Grenfell Tower fire, thousands of Londoners are still living in fear, stress and uncertainty. While further financial support is welcome, the funding proposals announced today amount to a leaseholder lottery – they are not a solution for all unsafe buildings and fail to protect many leaseholders from facing huge costs. I have been clear – no leaseholder should be burdened with the cost of removing unsafe cladding, and forcing anyone to take on debt is simply unacceptable.
“It is welcome that ministers have accepted the principle of my proposals for a levy on developers. They must now introduce this without any further delay.
“For many London leaseholders, the last few years has been a complete nightmare. It is time for ministers and developers to stop passing the buck, and give all leaseholders the security and peace of mind they desperately need and deserve.”
Jonathan Frankel, head of the property litigation dept at Cavendish Legal Group, said: “The £3.5bn announced today is completely insufficient to deal with even a fraction of the blocks up and down the country where these repairs must take place.
“But the fact that it only applies to buildings over 18 metres will cause even more uncertainty for those residents and leaseholders living in lower rise blocks where they feel insecure and unsafe. It may be considered a lower risk, but it’s a risk nonetheless which will impact the saleability of their property.
“The leasehold protection scheme capping payment for repairs at £50 a month for leaseholders which has also been announced will bring little comfort to many who feel they shouldn’t have to pay for somebody else’s mistakes.”
Mark Hayward, chief policy adviser, Propertymark, said: “Today’s announcement is just a start and the government must now also commit to completely eradicating this type of cladding to ensure the safety of all properties and residents, not just in England but across the United Kingdom.
“Supporting and challenging our industry to deliver change is more vital now than ever, and it is encouraging to be one step closer to ensuring that people are safe within the confines of their own homes, as standard.”
This post has originally been featured in Property Wire.