Leaseholders react to the Chancellor’s levy for developers, which is aimed at covering costs of cladding repairs bills

  • Chancellor Rishi Sunak stated that developers would be subject to a levy of 4.4%
  • It will pay for repairs to homes that were damaged in the cladding scandal
  • Only developers with profits of more than £25m will be required to pay the levy
  • Leaseholders fear that the levy won’t cover the costs of the cladding crisis

Leaseholders involved in the Cladding Scandal have criticized an announcement in Budget for a 4 percent levy to large construction firms.

The money will help to create a £5billion fund to help cover the cost of repairs to dangerous cladding and fire safety defeats.

However, homeowners who were affected by the crisis claimed that the money was not a recent announcement and would not cover the true cost.   

Since the Grenfell Tower fire in 2017, concerns about cladding have become a national issue

Concerns about cladding since 2017’s Grenfell Tower Fire have become a national problem 

In the Budget, Chancellor said that developers would be affected by the 4 Percent levy. This was at the higher end than the 3 to 4% expected.

However, Rishi Sunak explained that only developers making profits of at least £25million would pay it.

Speaking to MPs, the Chancellor said: ‘We’re confirming £5billion to remove unsafe cladding from the highest-risk buildings partly funded by the Residential Property Developer Tax, which I can confirm will be levied on developers with profits over £25million at a rate of 4 per cent.’

Many homeowners have faced potentially disastrous bills after discovering that their homes had dangerous fire hazards and cladding.

These defects were discovered on high-rise buildings in Britain after the 2017 Grenfell Tower fire.

Some types of cladding are not being funded by lenders, leaving flat owners in unsafe homes and unable to sell until repairs are complete.

The Building Safety Fund was created to assist those in need. 

Mary-Anne Bowring, a property management consultant Ringley Group, stated: “A blanket tax for developers is fairer that leaving leaseholders with the burden but it’s still a blunt instrument to fix the cladding crises.

“Fundamentally, responsibility should fall squarely upon those who ignored the potential hazards of unsafe Cladding in the First Place.” 

Lawrence Bowles of estate agents Savills said that while materials and labour costs are rising, and transaction volumes likely to fall next year, it is difficult to predict what the new levy will do. 

Leaseholders reacted to this levy by claiming that it doesn’t go far enough to help those who have been victims of cladding scandals, even if they are not at fault.

Reece Lipman, a Twitter user, said that it does not help. It’s not new money, only going back into the promised £5billion.’

And Steve Voller said the Chancellor is saving the Government money with the levy as its going towards the £5billion already announced. ‘It does nothing to help leaseholders and doesn’t plug the gap to the £15billion actually needed.’

Another social media user, referred to as “LeaseholdSlave”, said that it was not enough to solve the crisis. 

Paul123 wrote, “Feel completely let down and this Government. It’s like asking someone to apologize and return a fraction of what they have stolen from you. 

Twitter user “Chewie” said the levy made no difference and added that it was a slap on developer’s wrists and a slap to the face of leaseholders. 

It follows the case of flat owner Emily Boswell who lives in a two-bedroom flat in Leeds Dock.

The 26-year-old received an email from her management company about her service charges. 

It included an earth-shattering amount of £101,267.63, said to be for ‘external wall remediation 2021-22’.

Miss Boswell explained that she was told she didn’t have to immediately pay the money – as though we were in a position to do so anyway – because her Building Safety Fund application remains active.

“But it had to be added to our service charge bill for next year in case we don’t get any funding. We know that brickwork and tiling without fire breaks below are not eligible for funding. Our balconies are also not eligible.