London landlord forced to sell off social homes in PM’s constituency due to ‘unjust’ building safety funding

In total, ISHA plans to spend £2.8m plus VAT on building safety at Kinver House. The landlord stressed that this is money it has not been able to spend on investing in its existing stock.

Ultimately, it will also result in a reduction in social housing as ISHA has reduced its development programme and has had to sell off some of its existing stock to cover the costs, including in the prime minister’s constituency of Holborn and St Pancras.

While more than 50 large and medium-sized developers signed up to the government’s building safety pledge, smaller developers did not. The developer of ISHA’s block went into liquidation in 2018 and could not be pursued for remediation costs.

A total of 55 developers signed a developer remediation contract with the government, committing to remediate more than 1,500 buildings of 11 metres or taller, at a cost to those developers of around £3.2bn.

ISHA said it had also exhausted other options such as pursuing ex-directors of the firm, a process that comes with additional costs.

Ruth Davison, chief executive of ISHA, said: “This shows the unjustness of the taxpayer-funded schemes to make people’s homes safe.

“The only people not covered by the building safety and cladding safety schemes are social renters with a social landlord – the very people whose lives were so tragically impacted by the fire at Grenfell Tower.

“How can that be, after the inquiry concluded the state and regulators had failed, and that contractors and regulators had been mendacious?

“Why is it us and our residents and communities who are left to carry the can for this? ISHA is having to sell a handful of social homes each year to fund the remediation of building safety problems – for the first time in our 90-year history, including in the prime minister’s constituency.”

She added: “The government must act now to create a level playing field for accessing these funds… It is a matter of justice.”

Earlier this year, ISHA secured a new £40m revolving credit facility (RCF) with NatWest to pay for fire safety works, maintenance and development.

The landlord’s overall assessment of exposure where it has no recourse to developers is £25m. For the L12 group of London medium-sized associations – that owns more than 60,000 homes between them and which ISHA is a member – the cost is £180m.

At the Labour Party Conference last month, Angela Rayner promised a new remediation plan without revealing any details on what that would look like.

Asked to provide an update by Inside Housing, a Ministry of Housing, Communities and Local Government spokesperson said: “The progress on remediation has been too slow, and that’s why we are looking at options to ensure residents no longer have to face the ordeal of living in unsafe buildings.

“Social landlords have access to a £400m government fund but, as demonstrated by this case, we know more needs to be done and are working with the sector to identify what more could be done. We will set out further measures this autumn to increase the pace of remediation.”

It is understood that Ms Rayner will soon be meeting with developers to review remediation progress and agree a joint plan for accelerating it.