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BLOG: Leaseholders are viewed as cash cows in cladding scandal

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Written by: Emma Lunn
14/05/2021
The moment thousands of leaseholders had been dreading inevitably arrived last Friday – when a tower block covered in flammable cladding caught fire.

Fortunately, firefighters managed to bring the blaze at New Providence Wharf in Poplar, East London under control relatively quickly, and there was no loss of life.

But the incident was the last straw for leaseholders who have spent almost four years living in unsafe homes and facing six-figures sums to fix unsafe buildings.

No-one needs reminding of what happened at Grenfell Tower in June 2017. A fire in one flat quickly spread, largely due to combustible cladding on the building, and 72 people lost their lives. Hundreds lost their homes.

Building inspections subsequently found hundreds of buildings covered in similar dangerous cladding and hundreds more blocks with numerous other fire safety defects. These homes were built by developers and signed off as safe by local councils. But its leaseholders who bought their homes in good faith who have been billed for repairs and remediation.

The culprit in the latest fire was developer Ballymore which built the 1,535-home New Providence Wharf development in 2005. About 20% of the block was covered in ACM cladding – the same type of material which covered Grenfell Tower.

Ballymore says that the ACM cladding on the building ‘did not combust and played no part in causing or facilitating the fire’. But then it probably would say that.

The figures for removing cladding and rectifying other fire safety issues are eye-watering at both New Providence Wharf and hundreds of other buildings around the country.

Even before last week’s fire it would have cost an estimated £12m to correct safety defects at New Providence Wharf. Ballymore, which made of profit of £97m last year, has offered to pay in a paltry £500,000, while the government is chipping in £8m. Leaseholders are expected to stump up the remaining £3.5m.

Ballymore’s not the only developer to come up short when it comes to fixing problems it created. The same scenario is being repeated at blocks of flats up and down the country. At Millennium Point and Millennium Tower in Salford Quays, Greater Manchester, leaseholders are facing bills of £100,000 each to fix defective cavity barriers. These blocks aren’t eligible for government help as they don’t have defective cladding – just the wrong kind of fire safety problem.

Affected leaseholders in Manchester say they face mental health issues, bankruptcy and homelessness unless the government foots the estimated £16m repair bill. The blocks’ builder, Millennium Estates, went into administration in 2009 while the freeholder, Compton Group, has refused to help.

These leaseholders, and thousands of others around the country, have found their homes are worthless and unmortgageable. Understandably no one wants to buy a flat in a dangerous building with a six-figure major works bill on the way. So, selling up is not an option.

Those that want to move to accommodate a growing family can’t do so – many have put plans to have children on hold. People who bought their home as a singleton can’t sell up and move in with a new partner. Couples who have split up can’t sell their home and separate. No one can move to take up a new job in a different location.

It’s hard to imagine the kind of pressure affected leaseholders are under. The government has repeatedly dragged its feet in coming up with a workable solution, instead calling on notoriously greedy developers to “do the right thing” while MPs literally do the wrong thing by voting against protecting leaseholders from financially ruinous bills.

The leasehold system has always been weighted against leaseholders, but the cladding scandal has shown just how vulnerable these ‘homeowners’ are, with people forced to pay for problems they didn’t create; all because they trusted a system that failed them, backed up by a government that doesn’t care.

There’s no simple solution to this mess but an obvious one is for the government to pay to make the buildings safe, then go after the developers for the cash. Until this happens it’s impossible to see how the Conservatives can claim to be ‘the party of homeownership’.

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