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TODAY'S OTHER NEWS

Thousands of landlords lumbered with loans and unsellable flats

It’s feared that the government’s latest funding to solve the cladding crisis will leave thousands of landlords with loans and unsellable properties.

Yesterday the government announced an additional £3.5 billion on top of an existing £1.6 billion commitment; this combined fund would be directed at removing or making safe the cladding on tower blocks over 18 metres in height.

There will also be a development tax to be introduced next year which will bring in an additional £2 billion over 10 years, to be spent on long-term cladding remedial work.

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However, blocks below 18 metres in height will not have fully-funded work, and the leaseholders - including of course thousands of landlords - owning properties within them will instead be offered loans; the government pledges that repayments on the loans will be capped at a maximum of £50 per month.

”The government needs to allocate funds to remove cladding and fire safety defects from all blocks irrespective of height. Most important of all, homeowners in lower rise blocks should not have to bear any of the costs to make their homes safe. A loan scheme will mean these homeowners will be shackled with another financial burden, which could make it extremely difficult to sell the property” explains Dominic Agace, chief executive of lettings agency Winkworth.

The spending and tax proposals - outlined by Housing Secretary Robert Jenrick yesterday - have been labelled “a bitter disappointment for leaseholders everywhere” according to the Leasehold Knowledge Partnership.

A spokesman calls it “shameful” and says: “Leaseholders in tens of thousands of buildings less than 18 metres have been told they will pay 100 per cent of the costs of fixing others’ mistakes. Leaseholders in buildings above 18 metres may still face ruinous costs of fixing non-cladding defects.

“The real culprits, the developers, are being let off paying anything. They get to keep all £30 billion they stand to gain from the taxpayer under the Help To Buy scheme.”

And Jonathan Frankel, head of the property litigation department at Cavendish Legal Group, comments: “The £3.5 billion announced is completely insufficient to deal with even a fraction of the blocks up and down the country where these repairs must take place. But the fact that it only applies to buildings over 18 metres will cause even more uncertainty for those residents and leaseholders living in lower rise blocks where they feel insecure and unsafe. It may be considered a lower risk, but it’s a risk nonetheless which will impact the saleability of their property.”

The Association of Residential Managing Agents says some 274,000 flats are estimated to have dangerous cladding in the highest blocks - many more when low-rise units are included too.

 

 

Paul Afshar, of the End Our Cladding Scandal campaign says: “The government promised us no leaseholder would have to pay to make their homes safe. Today we feel betrayed. We were hoping for a solution to stop the sleepless nights and for millions living in buildings less than 18m there has been none. Robert Jenrick needs to get a grip on the cladding crisis.

“Loans longer than mortgage terms for millions and not even enough to cover the cost of making the buildings that the government consider most high risk safe.Taxpayers and leaseholders are left to foot the bill for billions of pounds while the largest developers – who have made over £10 billion in profit since the Grenfell fire – are let off lightly. 

“Many people living in buildings under 18m will still have to bear the cost – for many above £30,000 – saddled with debt around their necks for 30 years.” 

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