Leaseholders in low-rise buildings fear cladding scandal bills

A low-rise building in London.

Despite direct government funding for high-rises, leaseholders in buildings under 18m in height face loans capped at £50 a month to fix cladding safety issues as well as other costly remediation works to ensure buildings are fire safe. - Credit: Holly Chant

Hackney leaseholders feel "trapped" and "forced to pay bankrupting bills" despite ministers announcing an extra £3.5bn fund to tackle the cladding scandal.

A Haggerston resident, who preferred to remain anonymous, explained that leaseholders living in buildings under 18 metres tall are facing loans capped at £50 a month to fix cladding safety issues and other costly remediation works to ensure buildings are fire safe. 

They said: "I only own 25 per cent of my flat and the full costs of all of this will be put on me."

Developers are "not taking responsibility for the unsafe buildings they have built and have made millions in profit", they added.

"Selling is not an option for any of us until we provide a fire certificate, so we are trapped, forced to pay bankrupting bills, whilst praying the government will find extra help."

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The news comes after Prime Minister Boris Johnsonn said he was " leaseholder should have to pay for the unaffordable costs of fixing safety defects that they didn't cause and are no fault of their own" during PMQs on February 3. 

The resident, who is also a member of a group called End Our Cladding Scandal, lives in Belvedere Court on De Beauvoir Crescent in a shared-ownership property built by developer Durkan and managed by Islington and Shoreditch Housing Association (ISHA), which is less than 18m and has been valued at £0 due to the cladding issues. 

They believe the building firm is offering "no help at all" and the housing association is trying to "pass over the cost".

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However, Ruth Davison, chief executive of ISHA said: "We are pursuing every possible avenue so we do not have to pass costs on to leaseholders.

"We believe that builders should pay, but [Belvedere Court] is past the point we can make a claim against them."

She said it is "pushing hard" for the government to commit more money to protect not-for-profit businesses such as ISHA and leaseholders who bought homes with all "regulatory sign-offs in place". 

The small housing association has six buildings over 18m and more than 30 between 11m and 18m, which means the cost of carrying out safety work will be significant.

ISHA is paying for a waking watch at Belvedere Court to ensure residents' safety but cannot say how safety work will be paid for due to an "ever-changing" government landscape. 

The housing association suggested leaseholders wait until new legislation comes into effect next year before extending leases and has held monthly meetings to discuss issues with residents since October

ISHA's chief executive added: "The safety of our residents is our number one priority. 

"Belvedere Court was signed off by qualified and competent people when it was built as complying to regulatory standards at the time, but our investigations have found it didn't.

"This is sadly not unusual in the growing safety scandal."

In response, a Ministry of Housing, Communities and Local Government spokesperson said: "It’s right we’re taking a proportionate risk to fire safety – this is based on longstanding expert advice and evidence which shows cladding is a higher risk and can act as a fire accelerant.

“For buildings between 11m-18m we’re supporting cladding remediation schemes, ensuring no leaseholder will pay more than £50 a month as part of a new government-backed scheme.

“The loan schemes will be launched in due course, and we will publish more details on how these will work soon.”

Buildings over 18m are treated differently because of the Home Office's analysis of fire and rescue service statistics, which suggest buildings between 18m and 30m are four times as likely to suffer a fire with fatalities or serious casualties than apartment buildings in general. 

The government has also pledged to introduce a "developer levy" and new tax for the UK residential property development sector to help fund the extensive removal of unsafe cladding. 

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