Where next for flat owners with cladding?
Since the tragedy at Grenfell Tower on 14th June 2017, which took the lives of 72 people, there has rightly been a drive to ensure all flats are safe and such a tragedy can never happen again.
Nearly 4 years later however, progress has been slow for the owners and residents of the estimated 1.27 million leasehold flats in blocks taller than 11 metres. Of these, at least 839,000 are believed to be in buildings with some form of cladding.
It has been virtually impossible to get mortgages on flats in blocks taller than 18m or 6-storeys since Grenfell, and in the last 18 months measures designed to tackle the fire safety of low and medium-rise blocks less than 18m in height – namely EWS1 forms – have paralysed the market further. It’s currently virtually impossible to mortgage any flat in a block of any size with the smallest amount of cladding or balconies suspected to contain combustible materials, regardless of the overall fire safety position of the block.
In addition to this, the cost of remedial works and/or interim fire safety measures – such as ‘waking watches’ – has been so substantial that it has forced some flat owners to financial ruin and bankruptcy.
Pressure has been mounting on the government to take action to help flat owners and on Wednesday this week (12th Feb 2021) the housing minister – Robert Jenrick unveiled a 5-point plan aimed at providing reassurance to homeowners and confidence to the housing market. The key points were these:
- Government will pay for the removal of unsafe cladding for leaseholders in all residential buildings 18 metres and over (6 storeys) in England
- A finance scheme for leaseholders in buildings between 11 and 18 metres (4 to 6 storeys), ensuring they never pay more than £50 a month for cladding removal
- An industry levy and tax to ensure developers play their part
- A new safety regime to ensure a tragedy like Grenfell never happens again
- Providing confidence to this part of the housing market including lenders and surveyors
Reaction to the plan has been mixed with many feeling it unfair that those in a 17.5m-tall block will have to pay £50 per month potentially for many years, while those in an 18.5m-tall block will have it paid for them by the government. Points 3 & 4 have been widely welcomed, though we await detail on these.
Point 5 has not filtered through at the time of writing – we’ve heard nothing from lenders in response to the announcement, which we had hoped would immediately free up the market and lending for flats in blocks less than 18 metres tall.
Overall though, it does seem progress is finally being made, and hopefully a time where flat owners can buy and sell with freedom and confidence isn’t too far away.
If you’d like to talk about the issue of cladding and how it might affect you when it comes to mortgages then get in touch – we’re looking forward to hearing from you.
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