THOUSANDS OF leaseholders ‘risk bankruptcy’ due to funding cladding remediation, while ‘up to’ 1.5m are ‘unsellable’ due to the issues around the external wall fire review (EWS1) forms.

Reuters and The Times reported on the ‘thousands’ of homeowners in the UK facing ‘bankruptcy and homelessness’ due to the costs of removing and replacing combustible cladding, with campaigners from the End Our Cladding Scandal (EOCS) campaign claiming that ‘some 700,000 people’ in England continue to live in buildings with combustible cladding.

Despite the government’s extra £1bn in cladding remediation funding announced in March, the news outlet pointed out that this ‘will only cover about a third of the total cost’ for the national remediation programme. In addition to this, up to 1.5m flats are ‘unsellable because their owners cannot demonstrate the safety of their cladding and insulation’, noted EOCS spokesperson Jennifer Reid.

She added that ‘many flats affected by this crisis are valued at zero so it’s hard for people to raise funds against them’, and ‘so there’s a likelihood that many people will get themselves into serious debt, face bankruptcy and losing their homes’. The news outlet discussed London flat resident Timea’s issues over her two bedroom flat, with she and other leaseholders having to pay around £13m to remove cladding, at a cost of around £35,000 per flat on average.

She commented that ‘I used all my savings to buy this flat. Now I’m stuck between a rock and a hard place […] I can’t afford the extra service charge or any further bills to remove cladding but if I don’t pay, they can take me to tribunal and terminate my lease’, and added that neither her building’s management company – Rendall & Rittner – nor the social housing association Optivo, which owns 65% of her flat, ‘had told her about any fire safety issues’.

She had ‘already’ needed to stretch her income to pay the ‘nearly doubled’ service charge of £450 per month, and added that ‘the possibility of a fire is not even the biggest issue here. The legacy of Grenfell is going to be hundreds of thousands of people being made bankrupt and homeless’. Rendall & Rittner responded that the cost of installing an interim 24/7 fire watch and a fire alarm were not covered by the government’s funds, so had to be passed on to leaseholders.

It stated that it ‘continues to seek ways of mitigating the cost to our residents... and has been communicating regularly with leaseholders’, while a spokesman for Optivo said that ‘the investigations, interim measures to keep residents safe and remedial works come at a huge cost’. Leeds residents Rachael Loftus discussed having to pay £12,000 for interim safety measures at her seven storey block, noting she had ‘used up all of my savings’ to fund a waking watch.

Ms Loftus said in turn that ‘once we get the bill for the cladding, I don’t know what I’ll do, I’ve heard it could be up to £80,000 per flat’, and her flat is currently ‘valued at zero’, with no bank allowing her to remortgage or get a loan: ‘We’re all working from home now so spending more time in the building, which increases the risk of accident. I can’t sell it, I can’t sublet, even if I left tomorrow I’d still be responsible for all the bills. There’s literally no way out of this.’

On building management company Centrick Limited, she said it took ‘a lot of persistence’ to get them to respond to fire safety concerns, and that ‘it doesn’t feel as though their focus is on our safety, just on us paying the bills’. The company responded that ‘we instated the most cost-effective, but equally safe, measures as quickly as possible, getting approval from independent fire engineers at every stage and consulting with the leaseholders before the works took place’.

London resident Victoria Robinson also shared that her flat in a five storey block is ‘unmortgageable’, and faces a bill of up to £50,000 for remediation works. Due to its smaller height, the building ‘will get no help’ from the government funding, and payments will cost over £1,000 a month on the flat she owns 75% of, with no ability to sublet due to her lease terms meaning she would need to buy the other 25%.

The block is rated B2, the ‘worst’ in terms of fire safety, and has ACM as well as high pressure laminate cladding, alongside combustible insulation and wooden balconies. Under leasehold law, flat owners have to pay for repairs, with housing association Clarion stating that this specific block’s works will be paid for by leaseholders unless the government expands funding.

She said: ‘It is a horrible situation and there is no way out. Even if the funding is provided, it’s going to take a really long time. I am therefore saddled with a flat that I can’t live in, sell, remortgage or rent out. We are having to pay rent to live elsewhere because of my husband’s job, while also covering mortgage payments on the empty flat that we can barely afford. For the same reason, I cannot sell the flat as no one else would be able to get a mortgage on it.

‘In an additional injustice, I will be charged a 100% share for the works, despite only owning 75% of the property. I am worried the flat will be repossessed and that I could be made bankrupt. I thought buying the flat was a good investment for my future but I now feel completely betrayed by the government — even more so because it was only thanks to the government’s shared ownership scheme that I was able to afford the flat in the first place.’

The Times pointed out that new analysis has found ‘at the present rate of repairs’ it will ‘take almost 150 years to replace’ all combustible cladding on high rise flats, but this excludes medium rises, and ACM removal is being completed at 1.7 towers per month, so ‘at this pace’ fixing 177 developments consisting of 16,600 flats ‘will take until May 2029’.

In turn, if another 2,784 tall buildings with ‘other flammable materials’ – which have registered with the £1bn funding – are to be ‘repaired at the same pace’, it would take ‘136 years for all 175,000 flats to be made safe’. An estimation has been made that the industry could ‘at best’ complete work on 2,784 buildings in 14 years, if the 200 companies that can undertake work ‘each take a year per tower’, but this again does not include buildings below 18m.

Such buildings would ‘also need remediating and will compete for the same contractors’, said Nigel Glen, head of the Association of Residential Managing Agents. In response, the Ministry for Housing, Communities and Local Government (MHCLG) said these ‘timescales suggested are completely inaccurate. Work is already complete or under way in more than 70% of buildings with ACM cladding, rising to over 90% in the social housing sector’.

MHCLG ‘expects building owners to complete ACM work by the end of next year’, and is ‘working’ to move buildings with unsafe non ACM cladding to the ‘next stage’ of funding so work ‘can begin as quickly as possible’. It also said it was ‘disappointing’ that over 60% of the 2,784 applications to the fund ‘did not provide basic eligibility information’ needed to ‘ensure work can begin as quickly as possible’.

A spokeswoman said that building owners ‘should be responsible for ensuring the safety of the properties and their residents’, and that ‘we expect them to meet remediation costs without passing them on to leaseholders’.