Housing Secretary Michael Gove has defended his proposal to make landlords with more than one investment property liable to pay cladding costs, saying the government doesn’t want to subsidise the wealthy.
He said: “The aim is to ensure that we are not in a position where we have a runaway commitment to people who are themselves of significant means.”
Speaking in the House of Commons, Gove confirmed that the only landlord leaseholds being supported by the Building Safety Bill are those with one property, whom he described as “landlords by default”.
Gove was challenged by fellow Conservative MP Ben Everitt, who said lots of his constituents in Milton Keynes North have multiple very small properties, using them as a pension.
They may therefore not be “of significant means”, as Gove put it.
Responding, Gove added: “Looking at those cases, seeing how widespread it is, I do not want to make any promises at this stage, but we will look sympathetically at any amendments that help to capture people.”
Gove noted that the Bill is still being amended by the House of Lords, so elements could be “refined”.
He also responded to the suggestion that making landlord leaseholders pay for cladding costs could slow down the replacement of cladding.
Gove noted that this concern is being looked at.
He said: “As you quite rightly pointed out, because the whole chain, the whole situation, is so complex, I do not think that we will ever have a perfect solution in which there will not be potential delays in some remediation or potential hard cases or injustices at the side.
“We want to listen sympathetically to all those and see if we can refine our approach to take account of that.”
The clear message coming from Gove was developers are principally responsible for resolving cladding issues. Other parties, like contractors and subcontractors also bear responsibilities, as revealed in the Grenfell inquiry.
Bob Blackman, Conservative MP for Harrow East, brought up the issue of people being unable to sell, mortgage or insure their properties in blocks with flammable cladding.
Gove said discussions are being held with mortgage lenders, who need to be certain that developers are going to take responsibility for cladding issues before writing a mortgage.,
He added: “We have said to the lenders, “We have introduced the legislations we said we would. It is in line with everything that we discussed that you thought would be prudent”.
“They are holding fire for the moment and I think that is entirely because they want to make sure that this legislation makes its way on to the statute book. I am hoping that they will then be in a position, if not beforehand, to say, “This is good. We have the assurance we need. We can now lend and get the market moving again”.
“Ultimately, and this is an argument I have made not just to the lenders but to the developers, it is in no one’s interest for the market to be frozen in this way.”
The debate noted that charging developers for cladding costs could be tricky for those based abroad, but Gove said he currently doesn’t want to “show my hand” on how the authorities plan to overcome that issue.
The landlord association argued that it’s unfair to charge landlords to remove cladding they had no role in installing.
The estate agency body meanwhile said the government doesn’t understand the buy-to-let sector if it thinks all landlords with multiple properties are wealthy.