London Mayor Sadiq Khan has urged the government to introduce a £3bn levy to be imposed on private property developers and housebuilders to pay for cladding replacement work
Khan has proposed that Government introduce the levy to address the “rampant inequality in building safety standards” and fund crucial cladding replacement work on properties across London.
City Hall analysis of accounts data for publicly listed housebuilders has revealed pre-tax profits of £30bn over the last decade. A 10% levy would raise at least £3bn to carry out cladding replacement work and help ensure no leaseholder is left out of pocket.
To ensure the levy is paid in full without impacting future development, Khan is suggesting that repayment could occur over a number of years.
A levy at 10% repaid over 10 years would reduce the typical profit margin developers make on new homes from 20 to 18.7%.
‘Life-changing for London leaseholders’
The Mayor of London, Sadiq Khan, said: “I have always been clear that the responsibility for funding building safety work must lie with Government.
“However, we cannot deny the role that industry has played in making decisions that have compromised the safety of buildings.
“I am determined to find a solution that can make homes safe without passing on the burden of the cost to leaseholders – it is wrong for them to bear the costs of historic errors they have played no part in causing.
“This levy would have a minimal impact on developer profits but would prove life changing for London leaseholders.”