UK Government to spend £3.5 billion tackling unsafe cladding
The UK Government has announced £3.5 billion in new funding to replace unsafe cladding for all leaseholders in residential buildings 18 metres (6 storeys) and over in England.
To pay for cladding remediation costs, a new tax, earmarked for the UK residential property development sector, will raise at least £2 billion over a decade, along with a ‘Gateway 2’ developer levy on certain high-rise buildings.
In a statement, the government said funding is targeted at the highest risk buildings in line with longstanding independent expert advice and evidence, with Home Office analysis of fire and rescue showing buildings between 18-30 metres are four times as likely to suffer a fire with fatalities or serious casualties than apartment buildings.
Lower-rise buildings, with less safety risk, will gain new protection from the costs of cladding removal with a new scheme offered to buildings between 11 and 18 metres. This will pay for cladding removal – where it is needed – through a long-term, low interest, government-backed financing arrangement.
Under the scheme, no leaseholder will ever pay more than £50 a month towards the removal of unsafe cladding. "This will provide reassurance and security to leaseholders, and mortgage providers can be confident that where cladding removal is needed, properties will be worth lending against," it states.
A five-point plan has been unveiled to bring an end to unsafe cladding:
- Government will pay for the removal of unsafe cladding for leaseholders in all residential buildings 18 metres (6 storeys) and over in England
- "Generous" finance scheme to provide reassurance for leaseholders in buildings between 11 and 18 metres (4 to 6 storeys), ensuring they never pay more than £50 a month for cladding removal
- An industry levy and tax to ensure developers play their part
- A "world-class new safety regime" to ensure a tragedy like Grenfell never happens again
- Providing confidence to this part of the housing market including lenders and surveyors
Mark Hayward, Chief Policy Adviser, Propertymark, said following the disaster of the 2017 Grenfell fire, it is welcome that the Government is finally increasing funding for residents stuck in buildings with unsafe cladding in England. The fire quickly swept through the 67.30m tower, claiming 72 lives.
"We hope that extra funds announced today will make the process quick, efficient and cover the work needed to resolve any safety concerns residents face. Today’s announcement is just a start and the Government must now also commit to completely eradicating this type of cladding to ensure the safety of all properties and residents, not just in England but across the United Kingdom," he said.
"Supporting and challenging our industry to deliver change is more vital now than ever, and it is encouraging to be one step closer to ensuring that people are safe within the confines of their own homes, as standard."
The government aims to protect future generations from similar mistakes by bringing forward legislation this year to tighten the regulation of building safety and to review the construction products regime to prevent malpractice arising again.
Tokyo 'most expensive city' for construction
Tokyo has picked up an unenviable gold medal after being classified the most expensive city for construction.
As the Japanese city prepares a subdued opening to the Olympic Games on Friday, the International Construction Market Survey 2021 by Turner & Townsend found it was the most costly for building, with an average cost of $4,002 per sqm, followed by Hong Kong ($3,894 per sqm) and San Francisco ($3,720 per sqm). New York and Geneva were ranked fourth and fifth respectively.
The survey forecasts that rising prices being seen in the global construction sector will be sustained through 2022 and into 2023.
The widespread disruption to global supply chains witnessed through the pandemic is also being sustained by high demand and competition for key materials between global markets including the US, Europe and Asia.
Globally, demand for steel, softwood and copper piping have seen prices rise sharply over the year, with increases of up to 40 percent seen in some international cities including Tokyo, Sydney, San Francisco, Los Angeles, Chicago, Mexico City, Sao Paulo, Birmingham, Glasgow and Dublin.
As activity accelerates, supply chain constraints are increasing and skills shortages are worsening, resulting in substantial construction cost inflation in many markets.
Neil Bullen, Global Managing Director, Real Estate Turner & Townsend said material shortages have undoubtedly recast the client and supplier dynamic and there is currently a shift in power from client to supplier in many markets around the world.
"Companies need to work closely with their supply chains to guard against these risks – moving from a ‘just in time’ to a ‘just in case’ approach to delivery," he said. “Beyond material and skills shortages, public and private sector clients across the world are juggling multiple, competing goals and priorities. From accommodating hybrid working patterns, to embedding social value into their operations and taking concrete steps towards net zero, success is no longer judged by the old mantra of ‘better faster, cheaper’.”
London ($3,203 per sqm), which ranked third in 2019’s report, fell to eighth place behind Geneva, Zurich, and Boston. The fall in ranking reflects the buoyancy of other construction markets and the combined effects of Brexit and COVID-19, which placed many projects on hold, restricting demand for new work in 2020.
According to the research, the most buoyant construction sector across all 90 markets are data centres, driven by the unabated growth in technology and digitalisation. It is the first year that data centres have topped the ranking moving up from sixth position in 2019.