It’s been over three years since the Grenfell tragedy.
Naturally, it raised concerns over building fire safety, particularly about cladding added for environmental reasons.
Let’s take a look at the cladding scandal and what it means for leaseholders.
The Scale of the Problem
Here are some stats to provide an overview of the scandal:
- 186,000 high rise flats have been registered for the government relief fund
- Up to 3,000 blocks are potentially affected
- Around 700,000 people live in these flats
- Typical cladding bill circa £30,000 per flat
- £1 bn is size of fund allocated for recladding
- £4.5bn – £5.5bn estimated cost of sorting affected blocks
- There are apparently only 291 fire engineers in the country qualified to perform inspections
- Nine out of ten buildings inspected so far have failed
This not only poses potential safety risks and fears, but also a financial burden for homeowners. Add to that the amount of leaseholders unable to sell or remortgage and it’s a crisis that affects millions.
The scale of the problem is huge, and multi-faceted.
Cladding & Leaseholders
Flats in high-rise buildings are usually leasehold properties. If the cladding fails the inspection and needs removing, the cost will likely fall to the leaseholder – not the freeholder.
While paying for repairs and dealing unexpected costs is a natural part of being a homeowner, the financial burden is huge – and unexpected.
Unsurprisingly, the threat of living in a potential inferno is taking an enormous toll.
There have even been reports of a building mental health crisis that living in buildings with this cladding is causing people.
‘Walking watches’ can be ordered if a building is deemed unsafe. This means that people walk around a block of flats (all day and night) ready to sound the fire alarm. However, the cost of paying for this also sits with the leaseholders.
In short: the fear is devastating, and a huge burden in many ways.
Another issue is also that the cladding was put up not by the request or fault of the homeowners themselves.
Yet, they’re the ones having to foot a potentially huge bill because their property is unsafe to live in.
While the chancellor previously announced the £1bn ‘Building Safety Fund’ for cladding removal, the government has also said that the cost of removal will be around £3.5bn. This means the fund falls short and many homeowners will be forced to pay.
In fact, the funding only covers around 20-30% of project costs, so owners will be subject to service charges Section 20 charges.
A number of different housing associations have also announced that due to charity laws, if funding applications are declined, flat owners will be footing the bill.
It’s also a particularly bitter pill to swallow for those being told they’re responsible for 100% of the cost, but who only own a small percentage of their property.
A recent campaign has called on the government to address 10 key points to #endourcladdingscandal.
What Changes Have Been Made?
As of 10th February 2021, the government announced £3.5 billion funding towards the cladding crisis – for high rise buildings only. Those in lower blocks (under 18m) will have to pay reparation costs via a new low-interest loan scheme to pay for works, with monthly payments capped at £50.
For many, this is simply not good enough. Some leaseholders are now left feeling betrayed.
Why Has Progress Been So Slow?
The government’s reaction had been disappointing, but not exactly surprising. It’s a nasty cocktail of inaction due to:
- Lack of knowledge from politicians
- Shortage of expertise and resources
- Uncertain funding routes
- Shortage of qualified contractors
- Knowledge gaps (e.g. timescales etc.)
What is EWS1?
The EWS1 (External Wall Survey) form is designed for fire review, to check that blocks or flats haven’t been built with flammable materials.
It’s recommended for buildings of 18m or over. Only one survey is needed per building.
Why Is It Causing Issues?
Unfortunately, this survey is causing mortgage complications:
- Rules vary lender to lender (e.g. sometimes the form is only needed for flats built before February 2019)
- The survey isn’t mandatory
- It can cause delays and slow things down for homebuyers
- It can lead to mortgages being denied
- It’s being applied unnecessarily to certain buildings
- The survey was only launched in December 2019
It’s not only hopeful homebuyers feeling the frustration caused by the EWS1 form.
It also has left many leaseholders being ‘trapped’, unable to sell or remortgage their properties. Originally the survey wasn’t needed for buildings under 18m. However, the government then changed that, so now it includes buildings of any height. Some lenders are demanding the form for buildings that don’t even have cladding.
The issue is that there’s a limited number of professionals that can carry out the survey, putting the brakes on a certain part of the housing market and leaving leaseholders unable to sell.
The result has been widespread outrage. Roughly 3 million people are effectively trapped. This has led to a petition demanding leaseholders be freed.
Further Mortgage Issues
The government tightened safety advice in January. This means lenders are now requiring evidence that any modern-built flat is safe, not that it is not safe. This even now includes three-storey brick buildings.
But, it will take years to inspect all the buildings. And many more years on top of that to sort out the ones that are affected.
It’s evident that the government needs to take action. A fair system needs to be put in place and current rules reviewed.
Thankfully not every high rise block is as dangerous as Grenfell Tower was – but the system for assessing safety of buildings does not seem to reflect this.
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How can you help?
Email your MP and demand action – make your voice heard. This affects millions of leaseholders up and down the country – the time to deal with it is now!
Last Updated: February 10th, 2021