Shabana has written to the Department for Levelling Up, Housing and Communities regarding its pledge to introduce a cladding insurance scheme.
Constituents living in buildings clad in combustible materials have faced extortionate buildings insurance premiums – with some reported increases of over 1,000%.
After spending years lobbying the Government and the FCA on this issue, Shabana welcomed the decision to direct the FCA to conduct a review.
In the published review, the FCA recommended a Government-backed insurance pool for affected buildings, driving down premiums in the sector.
In her letter to the Secretary of State, Shabana calls for faster action to protect leaseholders for spiralling costs.
You can read the letter in full below.
Letter to the Secretary of State
Dear Secretary of State
I am writing to you regarding the extortionate buildings insurance premiums faced by my constituents living in buildings affected by cladding or fire safety defects.
My constituents have had to pay out hundreds of thousands of pounds to insurance companies, as their premiums continue to increase by more than 1,000%. These increases take no account of the mitigation measures leaseholders have paid to bring down the risk of fire whilst cladding and fire safety defects are remediated. Leaseholders are left with no choice but to pay the extortionate premiums not only to keep their buildings insured, but also to adhere to the conditions of their mortgages or else risk repossession.
After spending years lobbying the Government and the FCA on this issue, I welcomed your decision to finally direct the FCA to conduct a review into the sector and what, if any, market intervention could take place.
I was encouraged by some of the initial findings published in May, and despite it being months late, I welcome the review we finally received from the FCA in September.
In particular, I welcome the recommendation of an insurance pool – something I and many others have been calling for, for a number of years now. However, I am concerned about the length of time this will take to be established. With the winter bringing soaring energy prices and cost of living concerns, what will the Government do to provide immediate support for this group, who are facing eye-watering insurance bills now?
Additionally, please outline whether the Government intends to provide financial backing to the insurance pool, and act as insurer of the last resort, as recommended by the FCA.
In my Westminster Hall debate earlier this year, I outlined a fair interim solution whereby additional costs leaseholders have incurred for extortionate buildings insurance could be included within the Building Safety Act’s £10,000 cap. The Minister responding to the debate, Stuart Andrew MP, said that he would take the proposal back to the department. Therefore, I would be grateful if you could inform me what discussions have taken place regarding this proposal?
Leaseholders need action and help with their bills urgently, there is no time left to wait.