Network Homes has obtained a consumer credit licence from the Financial Conduct Authority (FCA) to provide loans to leaseholders saddled with the cost of paying for cladding remediation work.
Under the plans, which are understood to be in their early stages, leaseholders will be able to pay back the cost of any work to remove cladding over a period of 10 years, interest-free.
Network Homes has submitted three applications to the government’s £1bn Building Safety Fund, which is aimed at helping with the removal and replacement of non-aluminium composite material (ACM) cladding and some types of combustible insulation.
Additionally it has accessed the ACM cladding remediation fund.
But it warned that the fund would not cover all of the costs, and that some could be passed on to leaseholders.
Speaking at the Social Housing Finance Conference on Thursday, Peter Benz, finance director at Network Homes, said the organisation had put a number of measures in place to support affected residents.
These include a Section 20 consultation process linked to a dedicated procurement process for ‘last resort’ charging of leaseholders and shared owners where “costs cannot be recovered elsewhere”, he said.
He also said the FCA licence would enable it to offer a loan product to enable 10-year, interest-free repayment periods for leaseholders and shared owners.
“This will not be a product that is available to everyone, but dedicated to this area of activity, and to allow the provision of debt advice to our residents,” he added.
Of the 20,000 homes that Network Homes owns and manages, around 4,000 are owned by leaseholders.
He said that the housing association is also pursuing other avenues to recover the cost of removing potentially dangerous cladding from its blocks.
“We have been very clear in setting out our stall with all the involved parties, and where we have found defects, particularly workmanship defects, that we will try to recover the maximum amount we possibly can,” he said.
“Some contractors have been willing to negotiate on reasonable terms, and where they have not we have taken the necessary legal steps.”
He said Network has “promised leaseholders that we will attempt recovery from all other sources before we charge them”.