Ministers and insurance companies engaging over demands for building safety remediation works for low-rise residential blocks

The Building Safety Act 2022 introduced their updated fire safety standards for low-rise residential blocks following the fallout from the Grenfell Tower tragedy in 2017.

Ministers are now in talks with insurance companies over demands for building safety remediation to low-rise blocks.

What's been going on with low-rise blocks?

Last year, the updated version of the Building Safety Act reached a milestone in its safety reformation, stating that leaseholders would not be responsible for any payments concerning fire safety works in their properties.

However, tenants in residential blocks measuring under 11 metres have been told they are “non-qualifying leaseholders” meaning that they will be footing the bill for any necessary works. Despite this, the official guidance for fire risk assessors does not state any restriction of this kind.

Yet, the Government has continued to insist that works are not proportionate to buildings of this height or under.

Tenants in low-rise blocks have since been told to seek remediation work through mortgage providers or insurers, with many stressing that they have no way of funding these upgrades and are unable to pay the associated costs.

Even in cases where a building surveyor has granted the property’s external wall a B1 rating, stating no remediation work is needed, insurers are still pushing works to make sure premiums remain affordable.

What ministers are saying

Building Safety Minister, Lee Rowley said; “It is generally accepted that risk to life is proportional to the height of buildings. There is no systematic risk in buildings under 11 metres, which are very unlikely to need costly remediation to make them safe.

“Where an external wall assessment has been carried out in line with guidance from the British Standards Institute shows acceptable risk, premiums should reflect that”.

He continued; “Insurers should offer affordable premiums and should not be prescribing additional remedial works. My department is engaging with insurers on this matter.”

Labour MP for Camberwell and Peckham, Harriet Harman, asked “whether the Department for Levelling Up, Housing, and Communities is planning to provide support to residents who are being required by their insurer to remediate significant building fire safety defects on buildings under 11 metres in height, but whose building developer is rejecting a claim on the basis that the fire risk to individuals was deemed significantly low enough for the building to achieve a B1 EWS1 rating”

Insurers stance

The role of the insurance industry has come under fire following a report by the Financial Conduct Authority (FCA) that suggested leaseholders should become customers under the regime.

This would ensure they had the power to clamp down on rising premiums, especially where the payment of commission to brokers has been increased.

Insurers have put up the price in the case of fire safety risk, meaning residential blocks that need upgrade works have seen a 1,000% hike in their insurance premiums.

According to the report conducted by the FCA, they found large commission payments inflated the cost of insurance premiums further; with brokers unable to identify why this money had been distributed in the first place.

Furthermore, the report recommended a pool-based approach when it came to insuring high-rise buildings.

The Association of British Insurers (ABI) is believed to be working on the proposal, likely to be implemented by the end of the calendar year before insurance policies are renewed.

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