In his 2020 Budget, the Chancellor has today announced an additional £1bn of government funding to address the issue of unsafe cladding on high rise buildings, ending months of uncertainty for building owners and leaseholders.

Up to now, the Government has provided funding to cover the cost of replacing aluminium composite material (ACM) cladding, which was found to have contributed to the spread of fire at Grenfell Tower. Research and investigation into fire safety have moved on at speed post-Grenfell, however, and it has become clear that a wide range of cladding materials may also present a fire risk. A recent report issued by the Association of Residential Managing Agents (ARMA) estimates that there are a further 1,375 buildings with unsafe, non-ACM cladding – almost eight times the amount of buildings thought to be affected by ACM cladding.

This has meant that many thousands of leaseholders find themselves in the same, unenviable position as those affected by ACM cladding, with devalued, unmarketable properties in a potentially unsafe building. Without any incentive to replace the cladding, many building owners have to date either delayed in carrying out any remedial works, or sought to recover the extensive costs from leaseholders via the service charge.

The announcement of further funding provides welcome relief for all concerned, but questions will remain. It is not yet clear how quickly the funding will be made available, and whether long-mooted sanctions will be introduced for landlords who don’t take action even with the benefit of funding. Given the number of buildings expected to qualify for the new funding, there could also be delays in processing applications, and issues for the supply chain in sourcing materials and labour to physically carry out the works. For leaseholders, all of this means that whilst the prospect of a solution is now in sight, there could still be trouble ahead.

Birketts have extensive experience of advising building owners and affected leaseholders in relation to various issues surrounding unsafe cladding on high-rise buildings and managing applications for funding in this area. For more information please contact James Humphreys or another member of the Property Litigation Team.