Leaseholders react to Chancellor’s levy on developers, aimed at helping to cover cost of cladding repair bills
- Chancellor Rishi Sunak said developers would be hit with the levy of 4%
- It will help to pay for repairs to homes caught up in the cladding scandal
- Only developers with profits of more than £25m will be required to pay the levy
- Leaseholders say the levy will fail to cover the cost of the cladding crisis
Leaseholders caught up in the cladding scandal have criticised an announcement in the Budget for a 4 per cent levy on 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.
But those homeowners affected by the crisis said the money was not a new announcement and would fail to cover the true cost of the crisis.
Since the Grenfell Tower fire in 2017, concerns about cladding have become a national issue
The Chancellor said in the Budget that developers would be hit with the 4 per cent levy, which was at the higher end of the 3 to 4 per cent 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 been left facing potentially ruinous bills after discovering dangerous cladding and fire defects on their properties.
Such defects have been found on high-rise buildings across Britain following the Grenfell Tower fire in 2017.
Lenders are now refusing to provide finance on some types of cladding, leaving some flat owners trapped in unsafe homes that they are unable to sell until the repair works are completed.
The Building Safety Fund was set up to help those affected, applying to those in buildings above 18 metres high.
Mary-Anne Bowring, of the property management consultancy Ringley Group, said: ‘A blanket tax on developers is fairer than leaving leaseholders to shoulder the burden but it is still a blunt instrument to use to fix the cladding crisis.
‘Fundamentally, accountability should fall squarely on those who overlooked the potential hazards of unsafe cladding in the first place.’
Meanwhile, Lawrence Bowles, of estate agents Savills, said: ‘At a time of rising materials and labour costs, and given likely falling transaction volumes next year, it is hard to know what this new levy will raise.’
Leaseholders have reacted to the levy, saying it does not go far enough in helping those who are victims of a cladding scandal through no fault of their own.
Twitter user Reece Lipman said: ‘It does nothing to 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.’
Meanwhile, another social media user with the name ‘LeaseholdSlave’ said: ‘It is nowhere near enough to solve this crisis.’
And Paul123 wrote: ‘Feel totally let down by this Government. Its like asking a mugger in the street to say sorry and hand back a fraction of what they just stole from you.’
A Twitter user who goes by the name ‘Chewie’ said the levy ‘makes zero difference’, adding: ‘It’s a slap on the wrist for developers and a slap in the face for 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: ‘We’ve been told we don’t have to pay this money right this second – as if we’re in a position to pay it anyway – because our Building Safety Fund application is still underway.
‘But it had to be included in our service charge bill for the coming year in case we do not get any funding. We already know that two of the materials – brickwork and tiling with no fire breaks beneath – and our balconies are not eligible for funding.’