Cladding crisis continues to impact UK housing market

By leveraging the green, amber and red classification based upon the External Wall System 1 certification (EWS1), integrating it with other data sources such (planning records, fire safety certifications, Land Registry and Census data) and comparing pre- and post-Grenfell data, PriceHubble was able to provide in-depth insights into the financial and social challenges posed by cladding in the UK. 

Key findings include:

• London: 170,000 households in red or amber buildings. In the London borough of Barking and Dagenham, 37% of mid-to-high-rise buildings are flagged as red or amber, with transaction volumes for red-category properties dropping by 82% since the Grenfell Tower fire, and prices falling by 24%. In Croydon, transaction volumes dropped by 85% for red-category properties, and the average sales price declined by 33%.
• Manchester: 46% of mid-to-high-rise properties are impacted by cladding issues. In Salford, transactions for red-category properties have dropped by 67%, and prices have fallen by 30%, mirroring the broader challenges seen across the wider urban area of Manchester. 
• Young renters or owners are disproportionately affected, as 40.7% of 16-24-year-olds live in flats, young renters or owners are more likely to live in properties with unresolved safety concerns.
• The cladding crisis is one of several factors contributing to the broader underperformance of flats in the UK property market versus other property types.
• The cladding crisis has left thousands of homeowners grappling with unsellable properties and mounting financial challenges, such as difficulties in renewing mortgages but also additional costs, predominantly the increased service charges to cover fire safety measures. “For many first-time buyers, particularly those who may have used schemes like Help to Buy, the financial implications of the cladding crisis are likely to be particularly overwhelming,” notes Julia Middleton, Real estate Economist at PriceHubble.

Navigating the road ahead
While some progress has been made through funding initiatives and remediation efforts, the challenges remain significant. Addressing safety concerns and rebuilding confidence in the housing market will likely require transparent, reliable data to guide decision-making and support effective solutions.