Cladding Safety Scheme Extended to Eligible Buildings Under 11 Metres

Background

The Government has announced a significant expansion of financial support for leaseholders living in buildings with building safety defects, extending funding to certain buildings under 11 metres where serious fire safety risks have been identified. The new funding will be delivered through the existing "Cladding Safety Scheme" and will be prioritised according to the level of risk posed to residents. 

Until now, Government funding has largely focused on high-rise buildings meaning many leaseholders had limited access to support, despite facing potentially significant remediation costs. The extension of funding is intended to address this gap.

Building Safety Minister Samantha Dixon stated that residents should not be left living with dangerous cladding simply because their building is not tall enough to qualify for support, emphasising that remediation efforts will increasingly focus on those buildings presenting the greatest risk to life.

 Insurance Costs Under Review

Alongside the funding changes, the Government has welcomed a new review by the Financial Conduct Authority ("FCA") into how insurance premiums for buildings with fire safety risks have evolved since reforms brought by the FCA in 2023. The 2023 reforms strengthened requirements for insurers to demonstrate that their products deliver fair value to customers. This includes leaseholders who often bear the cost of building insurance through service charges.

High insurance premiums have become a significant financial burden for many leaseholders, even where remedial works are underway. The FCA's review will consider how insurers' pricing models have changed over time, whether firms are appropriately considering leaseholders' interests when assessing fair value and the extent to which remedial works are being reflected in insurers' risk assessments. 

The review is likely to be welcomed by leaseholders who continue to report insurance costs as one of the most significant ongoing consequences of the building safety crisis.

Further Regulatory Reform 

The Government has also announced several initiatives aimed at improving the operation of the building safety regime:

1. plans for a new Single Construction Regulator, intended to bring together different elements of the building regulation system and create a more coherent regulatory framework;
2. measures to simplify the process for issuing Building Assessment Certificates and provide clearer guidance to accountable persons and building owners; and
3. a consultation on facilitating emergency works together with consultation responses aimed at enabling existing buildings to progress through the regulatory process more efficiently whilst maintaining appropriate safety standards.

What does this mean for the sector?

The announcement reflects the continued move towards a risk-based building safety regime. The Government's focus appears to be on the level of risk presented by a building, rather than on height thresholds. For leaseholders in lower-rise buildings, the changes may be significant in providing access to support that was previously unavailable.

For building owners, developers and those involved in remediation projects, the announcement is another indication that the Government intends to accelerate the progress of remedial works. 

The success of the new regime remains to be seen and further detail is expected through the proposed Remediation Bill and associated regulatory reforms.

For any queries on the contents of this article, or on any building safety related matter , please contact our dedicated Building Safety Group, led by Mark Pritchard and Bhavini Patel.