1 IN 7 HOUSE SALES UNDER THREAT
Thousands of deals could be sunk by cladding scandal
BRITAIN is facing its biggest housing crisis in a generation as failures to fix unsafe homes are putting one in seven property deals at risk of collapse, the Mail can reveal.
More than a million homeowners have been left unable to sell or remortgage their properties in the wake of the Grenfell disaster.
Hundreds of thousands of leaseholders in unsafe homes face average bills of £40,000 – and some of up to £115,000 – to replace dangerous cladding, similar to that found on Grenfell Tower in west London, where an inferno killed 72 people in June 2017.
Tens of thousands of sales are already thought to have fallen through, and now exclusive analysis by consultancy Capital Economics shows that up to 14 per cent of
‘It is a disaster for leaseholders’
all transactions could be sunk by the scandal. Estate agents in badly hit parts of the UK say that up to 80 per cent of their stock is unsellable.
National Housing Federation chief executive Kate Henderson said: ‘This has inevitable consequences for the housing market, creating a bottleneck of leaseholders unable to move out and buy somewhere else, and people in need of affordable homes unable to get on to the housing ladder.’
Tory MP Royston Smith, who is leading a backbench campaign on the issue, said the crisis ran roughshod over Conservative ideals of ‘the home-owning democracy’.
Mr Smith said: ‘We get people to buy into that dream, sometimes using subsidies or tax breaks, and then we retrospectively change the regulations, abandoning tens of thousands of people in unsafe and unsellable properties. It is a disaster for leaseholders.’
Experts believe it could take another ten years to fix all unsafe homes at the current rate, putting up to four million lives on hold.
The Government has set aside £1.6 billion to fund repairs, but MPs estimate the total cost will be closer to £15 billion. Work cannot begin until comprehensive funding is released. The leaseholders are already paying at least £2.2 billion a year between them for stop-gap safety measures and insurance hikes while they wait for work to begin.
The Mail yesterday launched a campaign to end the scandal. We are calling on ministers to fix Britain’s
dangerous buildings within 18 months and spare leaseholders the crippling financial burdens.
Labour, the Lib Dems and more than a dozen Tory MPs yesterday added their support to our campaign. TV property expert Phil Spencer is also backing it. He said: ‘The Government has to do something. It is blatantly unfair.’
Government guidance means homeowners must get a form proving their building is free from 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 (18m). But in January 2020, 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 1.27 million – 5 per cent of England’s homes and 40 per cent of all flats. There were 137,000 flat sales in England last year, meaning 55,000 deals could be directly affected, according to Capital Economics.
But the firm said the real number could be double that because the flat owners’ purchase of their new home would probably also collapse. It means 14 per cent of an estimated 787,000 annual transactions are at risk. Capital Economics believes house prices will fall by 5 per cent in 2021 due to the pandemic. But it said flat owners being unable to sell could reduce demand for ‘second step’ properties, leading to price falls on larger homes of up to 8 per cent.
Mr Spencer said the market could be stopped in its tracks.
Douglas Haig, director of James Douglas estate agents, said about 80 per cent of his stock in the Cardiff Bay area was unsellable. He added: ‘It’s completely log-jammed the market because lenders in general are turning round and saying all buildings need EWS1 forms.’
A Government spokesman said: ‘We don’t recognise this analysis. Through no fault of their own, some flat-owners have been unable to sell or re-mortgage their homes – and this cannot be allowed to continue. That’s why we have secured an agreement that owners of flats in buildings without cladding do not need an EWS1 form to sell or remortgage their property. If a form is genuinely needed, we are providing £700,000 to speed up the process.’
DAY two of our campaign to win justice for more than a million homeowners left with unsaleable, unsafe properties in the wake of the Grenfell disaster focuses on its devastating impact on the housing market.
As well as being a personal tragedy for those facing unaffordable bills to replace faulty cladding, it has left a staggering one in seven property deals across the country in danger of collapse.
As champions of the home- owning democracy, the Tories have a duty to act now. Faulty cladding must be replaced without further delay and those responsible for installing it made to pay.
Leaving owners to foot the bill would simply compound what is already a monstrous injustice.