UK Building Safety Crisis Sparks Debate in House of Lords

A looming building safety crisis in the UK is set to be debated in the House of Lords on September 13th, 2023, as Jeremy Hunt warns of a potential multi-billion-pound bill to rescue up to 1.7 million homeowners who may be affected.

The crisis stems from the government’s leaseholder protection legislation introduced last year in response to the Grenfell fire in 2017. However, this legislation fails to cover three specific groups of people: those living in low-rise flats, those who have enfranchised, and those who own more than three flats. As a result, a significant number of homeowners are left in an uncertain position until all buildings are assessed for fire safety issues. This uncertainty has impacted the entire flat market, as no one can definitively identify which buildings are affected.

For those in unsafe buildings, the options are grim: they either possess a flat they cannot sell or face the financial burden of covering potentially exorbitant remediation costs for various building safety defects, including cladding similar to that of Grenfell, found on low-rise blocks. Furthermore, they may be living in potentially hazardous flats requiring immediate safety improvements.

The government’s partial leaseholder protections have created a three-tier flat market, with varying degrees of protection for homeowners. This has caused difficulties for conveyancers trying to secure professional indemnity insurance and poses a risk to a significant portion of the UK housing market.

The crisis may worsen next year when new banking rules come into effect. The Bank of England is set to implement “Basel 3.1” standards in 2025, requiring lenders to revalue a loan if an event occurs that results in a likely permanent reduction in the property’s value. Given the existing three-tier flat market, widespread revaluations seem inevitable, leading to hardship for partially or wholly unprotected leaseholders and potential bad debts for lenders.

To address this crisis, an amendment to the government’s bill, tabled by the Earl of Lytton, a crossbench peer, is scheduled for debate in the House of Lords. The amendment aims to hold developers or lead contractors permanently liable for building defects at the time of construction or recover from a broad building industry levy if the builder no longer exists. It seeks to fund the remediation of all unsafe flats, thereby protecting the 1.7 million homeowners currently excluded and eliminating the three-tier flat market.

This amendment enjoys widespread support from various stakeholders, including thousands of individuals, the National Residential Landlords Association, Property Mark, and former state premier of Victoria, Australia, Ted Baillieu.

If the amendment is rejected, the chancellor will face a difficult choice between residential valuation write-downs, potential homelessness for many, and negative repercussions for the banking system, or government intervention to bail out up to 1.7 million people while grappling with the problematic three-tier flat market.

For more information about the Earl of Lytton’s amendment, please visit

To sign the petition, click here. You can watch a video from the petition’s founder, Jake, to find out more here.

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