Tough new measures designed to force housebuilders to pay to remove cladding and protect leaseholders from exorbitant costs have been unveiled by secretary of state for levelling up Michael Gove.

The government plans to block planning consent and building control sign-off on developments, effectively preventing them from building and selling new homes.

The proposals will see the industry pay to fix historical problems, with a view to freeing hundreds of thousands of leaseholders from shouldering an unfair financial burden while also enforcing a common-sense approach to avoid unnecessary work.

Alongside further leaseholder legal protections, courts will also be given new powers to stop developers using shadowy shell companies, which make them difficult to trace or identify who they are run by, so they can avoid taking responsibility for their actions.

If passed by Parliament, these amendments to the Building Safety Bill will be brought into law.

Cost Contribution Orders will be able to be placed on manufacturers who have been successfully prosecuted under construction products regulations. These orders will require them to pay their fair share on buildings requiring remediation.

Amendments to the Building Safety Bill, revealed today, will also allow building owners and landlords to take legal action against manufacturers who used defective products on a home that has since been found unfit for habitation. The power will stretch back 30 years and allow recovery where costs have already been paid out.

New clauses will also enshrine in law the commitment the Levelling Up Secretary made in the House of Commons last month that no leaseholder living in their own home, or sub-letting in a building over 11m, ever pays a penny for the removal of dangerous cladding.

If passed by Parliament, these clauses will hugely reduce the invoices that have been sent to leaseholders for taking down cladding, in some cases for over £100,000.

Building owners who are not linked to the developer but can afford to pay in full will also be required to put up the money to do so.

In the small number of cases where building owners do not have the resources to pay, leaseholders will be protected by a cap. The cap will be set at similar levels to ‘Florrie’s Law’ which applies to some repairs to social housing: £10,000 for homes outside London and £15,000 for homes in the capital. This will limit how much leaseholders in this scenario can be asked to pay for non-cladding costs, including waking watch charges.

Any costs paid out by leaseholders over the past five years will count towards the cap, meaning some leaseholders will pay nothing more.

Gove said: “It is time to bring this scandal to an end, protect leaseholders and see the industry work together to deliver a solution.

“These measures will stop building owners passing all costs on to leaseholders and make sure any repairs are proportionate and necessary for their safety.

“All industry must play a part, instead of continuing to profit whilst hardworking families struggle.

“We cannot allow those who do not take building safety seriously to build homes in the future, and for those not willing to play their part they must face consequences.

“We will take action to keep homes safe and to protect existing leaseholders from paying the price for bad development.”