It was recently announced that managing agent SDL Property Management has joined a coalition of cladding campaigners, residents, property managers and the UK’s largest freeholders to call for a new multibillion-pound fund to remediate unsafe buildings.
Sam Massey MRICS FIRPM, Head of Professional Training and Qualifications for
SDL Property Management, PRS and Auctions spoke to News on the Block to explain why action needs to be taken.
A new study from the Association of Residential Managing Agents (ARMA) has highlighted the severity of the cladding crisis in the UK. By analysing apartment blocks across the country, the research has shown that up to half a million people could currently be living in unsafe buildings that were initially passed by building control when they were built.
There are numerous materials now classed as unsafe, which include High Pressure Laminate (HPL), which is at least as flammable as the ACM cladding used on Grenfell Tower. However, the Government’s existing fund to fix unsafe buildings is limited to ACM cladding only.
When we were presented with the research from ARMA, it was clear that we needed to back its campaign. The cost of making these buildings safe again is likely to run into the billions. Building owners and property managers have been stepping in to fix buildings but where costs aren’t recoverable from the original developers or via insurance claims, it is likely to fall to the leaseholders. The bills can be tens of thousands of pounds per building, which is just not affordable for many.
We’re facing a quite frankly unfair situation where homeowners are likely to face excessive bills for failed building safety policies that date back decades, often way before they owned the lease on their home. Resale will not help them to avoid the issue either as the properties could well be deemed worthless until the problem is fixed, leaving them also facing soaring mortgage and insurance costs.
Of course, these are leaseholders who may have already been misled and charged excessive fees by developers. The Competition and Markets Authority recently found worrying evidence that leaseholders were suffering a range of abuses when buying properties, including being told false information about the cost of converting leasehold to freehold and the difference between the two different types of ownership.
We all know that leasehold is a viable ownership option, but it’s difficult to argue against the fact that the current situation is making it look less attractive and credible to buyers.
The cladding crisis is wider than many imagined and impacts buildings in every city of the UK - we are potentially looking at up to 1,375 buildings. It’s to the Government’s credit that ACM cladding remediation is being funded following the Grenfell tragedy, which is estimated to be £600m for the removal of ACM cladding from 333 blocks. However, we are now nearly three years on from Grenfell and the study by ARMA shows that the issue is much deeper than anticipated.
This is why SDL Property Management has joined forces with other leading industry firms, lead by ARMA, to write an open letter to the new Chancellor asking him to step in and provide extra funding to make these homes safe. We urge the Chancellor to recognise the severity of the situation we are facing and take action.
Recently, the Government ‘named and shamed’ five building owners who are yet to fix dangerous ACM cladding on their properties, and we hope that the Government now acknowledges the wider issue with materials like HPL too.
It is not just the signatories of the letter calling for action either. A group of MPs recently spoke out to reveal the true impact of the cladding crisis on residents in their constituencies. The debate was hosted by Labour MP Hilary Benn, who said some leaseholders in Leeds were paying an extra £670 every month, in addition to service charges and their mortgage, to cover a ‘waking watch’ because of fire safety risks in their building.
During the same meeting, David Lammy, MP for Tottenham spoke about 432 local flat owners who could not get a mortgage or re-mortgage because of dangerous cladding on their building. Meanwhile, Tanmanjeet Singh Dhesi, MP for Slough, said constituents had been left facing sleepless nights and fearing bankruptcy and homelessness over the cost of cladding not covered by the Government’s ACM fund.
The meeting culminated in Hilary Benn calling on the Government to uphold its promise that leaseholders should not be forced to pay for replacing cladding, and for other types of dangerous material, not just ACM, to be covered by funding – echoing the thoughts of our coalition This is a very real situation, which is having a significant impact on leaseholders up and down the
country. There are calls from within the industry, there are calls from residents’ groups, there are calls from within Parliament, so I urge Rishi Sunak to read our letter and to step in and provide help where it is evidently needed.
