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Are you a mortgage prisoner because of cladding?
The Grenfell Tower disaster in June 2017 killed 72 people and was a massive tragedy where combustible, unsafe aluminium composite material (ACM) cladding was the cause of the blaze spreading so quickly. Investigations carried out shortly after the fire suggested similar cladding to that at Grenfell covered 208 tower blocks owned by councils and housing associations, as well as 176 privately owned tower blocks. Since then, more scrutiny has been focused on the building materials used on tower blocks.
Originally, it was only ACM cladded blocks that were seen as dangerous. However, now other types of cladding are also being deemed as unsafe and as a result of a change in thinking by the Housing Department and advisors, the number of impacted blocks has dramatically increased. There are now approximately 450 ACM blocks spread across the social sector - of which 208 are private residential blocks with the remainder being made up of social housing blocks, student accommodation, and hotels. Of the private blocks, only 28 have removed the cladding after three years. The estimate is that with the addition of new forms of cladding, there are now thousands of blocks affected, with some estimating that over half a million homes are impacted – and with it, the number of residents stuck in properties that have completely lost their value.
Government support
After the Grenfell disaster, the Government set up an initial fund to cover the reasonable costs of removing and replacing the ACM cladding. In March 2020, chancellor Rishi Sunak announced a further Building Safety Fund worth £1 billion on top of the £400 million already given to help with the removal of ACM and other types of cladding.
Sebastian O’Kelly, Chief Executive of the Leasehold Knowledge Partnership, a charity for leaseholders, said: “This is an acknowledgement that we have a massive problem with cladding of all types and that government is going to have to fund making these buildings safe. Is the money enough? Certainly not, given that housing associations alone say that they need £10 billion to sort out cladding on their sites.”
Mortgage prisoners
Flats in privately owned tower blocks are usually owned on a leasehold basis where the leaseholder pays the ground rent and the service charges to a freeholder or landlord to manage the building. If a building is deemed unsafe, you cannot get a mortgage on it. Now, for thousands of residents who are in flats with cladding, they have found that their properties have been affected and are now valued at zero. Until the freeholder removes and replaces the cladding with a safer material or at the very least has it tested, many leaseholders are stuck, unable to get a mortgage or remortgage their existing flats.
In June 2020, a survey carried out by the UK Cladding Action Group (UKCAG) supported by Inside Housing also revealed the reality for the growing number of people that have been made ‘mortgage prisoners’ in their blocks, as an increasing number of banks refuse to lend to prospective buyers on blocks with potentially dangerous cladding. Just over a third (34%) said they had difficulties selling their home due to fire safety issues, while (35%) said they had difficulties switching lenders.
The survey also revealed that nine out of 10 residents living in affected buildings have seen their mental health deteriorate as a result of issues with the cladding on their block. Of the 550 respondents to complete the survey, 22.5% reported having suicidal feelings (14.5%) or a desire to self-harm (8%)
With ongoing developments, including a United Nations’ warning that Britain’s failure to strip combustible cladding from high-rise buildings containing tens of thousands homes may be a breach of international law, and a focus on mental wellbeing with the Covid pandemic, there is a push to try and get a resolution moving faster. But for now, it’s a waiting game for those affected.
Further info
The End Our Cladding Scandal campaign was launched in May 2019 and calls on the government to fund the remediation of all blocks with dangerous cladding, without any costs being passed onto leaseholders. Further details can be found at: https://www.insidehousing.co.uk/insight/insight/end-our-cladding-scandal...
If you are affected and are stuck in a property and need some help coping with stress, contact MIND.
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