Cladding has made your flats worthless, homeowners told

Tens of thousands of homeowners who live in buildings with combustible cladding are being told that their properties are worthless by valuers, leaving them unable to sell or switch mortgage provider.

The issue of cladding came to the fore after the Grenfell Tower fire in June 2017, which killed 72 people. Aluminium panels on the west London tower block contributed to the disaster. While potentially unsafe cladding has quickly been removed from most council-owned buildings, huge numbers of people who own flats in private blocks still have dangerous panels on their buildings.

This has caused misery for homeowners who are trying to sell, as valuers must state that the property is worth zero because it does not meet current building regulations.

Nick Morrey of John Charcol, a mortgage broker, said: “It is causing buyers and especially sellers huge problems. We are seeing mortgage applications rejected because banks cannot lend anything against a property that has a value of zero.”

This is also a problem for existing homeowners who are left unable to remortgage. Mr Morrey said it was effectively creating a new generation of mortgage prisoners who are stuck with their lender and unable to switch. “They can’t move providers until the issue is resolved,” he said. “Huge numbers of people are being affected by this.”

A £200m fund was established by the Government earlier this year to pay for the replacement of unsafe cladding on private blocks more than 59ft high.

However, figures from the Ministry of Housing, Communities & Local Government show that just 13 of the 181 blocks affected in England have been fixed. Work is under way on a further 24 high rises, leaving 144 still covered Number of properties that are considered to have a value of zero until cladding issues are rectified in dangerous cladding. This affects up to 17,200 individual homes.

Unsafe cladding has been found on blocks of flats across England, from Plymouth in the south to Newcastle upon Tyne in the north, and most major cities have at least one unsafe residential building. Leeds, London, Manchester and Salford are most affected.

Mr Morrey called for a commonsense solution to the valuation crisis. “Surveyors should be able to say a flat is valued at a certain price, subject to seeing a report that proves it’s safe,” he said.

“If these blocks were worthless, I’d happily buy them for £1, wait until the work is done and then sell them for a huge profit.” The Royal Institution of Chartered Surveyors said it was in discussions with mortgage lenders to help homeowners.

The Housing Ministry said it was the responsibility of owners to ensure their buildings were safe.

“Residents’ safety is our utmost priority,” it said. “That’s why we have stepped in to fund the removal and replacement of unsafe cladding on high-rise buildings, including £200m for the private sector, to ensure this work is completed quickly.”