Red tape strangling 30,000 flat sales
It’s being dubbed the biggest property fiasco of modern times: how new rules in the wake of Grenfell have put 1.5m properties in jeopardy
WHEN Amie Lewis and Alex Timms found out they were expecting their first baby, they decided it was time to put their one-bedroom flat on the market.
Things moved quickly and the couple had accepted an offer on the apartment in Hackney, East London, within a week. They had also agreed a deal on a three-bedroom property nearby in Bow.
But a year later and they are still stuck in their tiny flat with three-month- old son Oscar. And their story is far from unique. The couple’s sale is among tens of thousands that have been torpe-doed by a red-tape nightmare that experts say ‘is the biggest build-ing fiasco of modern times’.
People like Amie, 44, and Alex, 45, have been unable to sell or remortgage their homes due to safety rules introduced after the Grenfell Tower fire.
Their buyer’s lender insisted they had a certificate to prove their flat did not have flammable cladding, but they were told it could take ten years to get the paperwork to prove it. And the whole chain collapsed as a result.
Amie says: ‘The stress has been indescribable. We have absolutely no idea how our future looks. It’s a really small one-bed flat. It’s fine for a couple, but with a baby we’re living on top of each other.
‘With Covid we’ve been working from home, squashed into a tiny space. It’s been horrific.’ Fears around cladding safety left thousands of homeowners stuck in fire traps — facing long delays and huge bills to get repair work done. But more and more sales are falling through on flats that are safe because owners face waiting up to a decade for the official certification.
AROUND 30,000 deals may already have collapsed due to the issue, Money Mail today reveals, and experts warn the number could hit six figures if the Government does not step in.
Kate Henderson, chief executive of the National Housing Federa-tion, says: ‘A really significant part of the flat market in England is currently frozen. This is clearly unsustainable for the property market and it is not acceptable for people’s lives to be on hold — with so much uncertainty and anxiety — for such a long time.’
The rules mean homeowners require a form to prove their build-ing is free of dangerous cladding. If it does pose a risk, an explanation of required repair work is needed.
It used to apply only to blocks taller than 60ft (18 metres). But in January, Government guidance was extended to buildings of all heights with any cladding, not just the type that caused the Grenfell fire in 2017. And blocks with no cladding are also caught by the rules.
It means the number of flats requiring an external wall survey (EWS1) has grown from 307,000 to around 1.5 million — 6 pc of Eng-land’s homes. But there are fewer than 300 chartered fire engineers who can carry out an EWS1 survey — just one for every 5,000 flats.
Leaseholders in low-risk build-ings are finding themselves at the back of the queue and some are being told to wait up to ten years before they can be signed off. Mrs Henderson says there has been a growing number of young people trying to buy their first property since lockdown, only to see their moves collapse.
Buyers trying to take advantage of the stamp duty holiday have also been knocked back. She adds: ‘We have heard of a couple of owners of two-storey terrace houses — built of brick with no cladding — who have been asked to provide an EWS1 form. Lenders increasingly seem to be operating a blanket approach in asking for these checks.’
A quarter of leaseholders requir-ing the certificate have seen sales collapse because they did not have one, according to a survey by campaign group the Leasehold Knowledge Partnership (LKP). A further 3.5 pc said deals had fallen through despite obtaining one.
THERE were around 134,000 flat sales in England last year, meaning roughly 30,000 deals may already have collapsed due to the issue.
Nick Morrey, of mortgage broker John Charcol, says: ‘This has already caught tens of thousands of people out and it could potentially affect hundreds of thousands.’
Nine in ten leaseholders who have received the form have been told their building requires reme-diation work, according to LKP.
They face paying tens of thousands of pounds each for repairs. The total bill to remove unsafe cladding is estimated to be around £15 billion.
The Government has set up a £1.6 billion repair fund, but lease-holders are expected to pick up most of the tab. Some face bills of up to £115,000 each to make their homes safe.
Almost a third of the buildings still wrapped in Grenfell- style flammable cladding have yet to undergo work to remove it, accord-ing to the Government.
Clive Betts, chairman of the Housing, Communities and Local Government Committee, says it is ‘probably the biggest building fiasco in modern times’.
He adds: ‘The Government does not recognise the seriousness of the financial demands that are going to have to be met. It should carry out the work and then try to claim the money back.’
Meg Hillier, chairman of the Public Accounts Committee, says the Government is ‘ morally responsible’ for the cost.
She adds: ‘They’ve extended the net for who is affected and that is shocking. If you are going to make a blanket decision to extend the fire safety rules, you have to sort the mortgage industry beforehand so it doesn’t gum up the system
any further. People’s lives will be ruined if the Government doesn’t step in.’
The EWS1 forms were brought in — following consultation between the Royal Institution of Chartered Surveyors (Rics) and banking trade body UK Finance — to give lenders more confidence in providing mortgages on multi-storey buildings. A UK Finance spokesman says: ‘Hundreds of blocks have already been assessed with many homebuyers being able to secure mortgages as a result.’
Gary Strong, Rics global building standards director, says: ‘The Government must urgently intervene to help identify all buildings which are unsafe, and to provide further and faster funding to ensure the situation can be remedied quickly without the costs falling to the leaseholder.’
A Government spokesman says the sales figures were ‘speculative’ and that EWS1 forms should not be necessary if buildings are lower than 60ft or without cladding. He adds: ‘There is other evidence that can prove a building is safe, and we want lenders to accept this for valuations. We’re also looking at what else we can do to support leaseholders, including working with professional bodies to see how we can increase the number of inspections carried out.’
The EWS1 form is also used in Scotland; its government is consulting on an alternative solution.