Families in a north London block of flats fear going bankrupt after being told they would have to foot a £1.7 million bill to replace flammable cladding.
Owners of properties in the L’Ecole development in Islington are ‘sick with anxiety’ after being asked by their freeholder Pinnacle Property Management to start budgeting for the repairs.
Leaseholders told Metro.co.uk the cost could work out at around £30,000 each as the building is under 18 metres so does not qualify for Government funding to deal with the issue.
They were informed of the ‘devastating’ bill after the timber-clad block failed a new fire safety inspection known as the External Wall Survey (EWS1).
Residents can’t sell without the form, leaving some trapped in overcrowded homes while ‘ill’ at the thought of pulling together the cash.
Mark Johnson, whose family-of-four are stuck sleeping in one bedroom, told Metro.co.uk: ‘We had already sold our property and bought one but we had to let it go because our buyer fell through because we could not get the EWS1.
‘We had a second child during the pandemic. We had planned to move to a three bedroom house in Bedfordshire, we need the space.
‘When we lost the house it was heartbreaking, my wife cried, it was so frustrating because we had already paid for the survey and solicitors fees, that was about £1,000.
‘[The freeholders] are saying they will not start the work until they have the money upfront, they aren’t going to get £30,000 off us if we don’t have it. I keep worrying about what they will do to get it, I don’t know if they can take us to court.’
EWS1s were designed ro check buildings over 18 meters but mortgage lenders have been demanding them on flat blocks of all sizes. The emerging crisis is imprisoning leaseholders in unsellable homes all across the country with many finding the cost of remediation for failed inspections being passed back onto them.
Mark owns 55% of his property under a shared ownership scheme but has been told by his landlord Peabody he is liable for 100% of the repairs under the terms of his lease.
The finance worker is in discussions about renting his flat out so the family can upsize but says this will add to his financial burdens as it is likely to cost thousands of pounds.
‘We now have four people in a one bedroom flat. We can’t re-mortgage, we can’t sell. We are trying to get permission to sublet, that is quite stressful but we just need to get out,’ he said.
‘It’s awful, especially because we don’t even own the full percentage of the property. We bought this property in good faith, it’s only 12 years old.
‘Even if we can rent it out we will be at a loss because we need someone to manage the property so there’s fees for that, landlord insurance, repairing any issues there are with the property, deposit and rent when we move, that’s going to cost more than what we will get for rent.
‘The wellbeing of the family is really suffering. You feel trapped, you feel depressed, when you want to do the best for your family but you can’t, it’s just heartbreaking. It’s not just me, everyone is in the same boat.’
Mark said he was using his savings to rent a bigger property but feared for people in his building who are not in a financial position to do this.
A letter from his freeholder seen by Metro.co.uk states the estimated figure for the fire safety works will be £1,425,000 plus VAT and that they are working out how this can fairly be apportioned between leaseholders, with the majority of work expected to affect three blocks.
The letter says it is ‘exploring all avenues of possible liability’ but that residents are being informed now so they ‘can start to budget’. It adds that the true cost won’t be known until the tender process is complete.
The Government launched a £1.6 billion funding pot to remove dangerous cladding from buildings following the Grenfell fire tragedy, but this is only available for high-rises over 18 meters.
Mark said: ‘The Government need to increase the funding pot, they need to include all buildings not just those that are 18 meters and above and if they don’t they need to give us an interest free loan or something.
‘We are facing going bankrupt to get this money, where Is the fairness in that? This could tip people over the edge.
‘I’m not saying it is for us, but it could for others if you are being hit with a £20-£30,000 bill you don’t have and you feel like there’s no way out.
‘You don’t sleep because you go to bed thinking about it, we are worried about it all the time.’
A damning Public Accounts Committee report published in September found the Government’s cladding fund will only meet around one-third of the estimated £3-£3.5 billion costs and questioned why there were ‘no plans to support residents or social landlords to meet the costs of replacing dangerous cladding in buildings below 18 metres’.
It said private leaseholders in smaller blocks with dangerous cladding have received ‘nil’ valuations for their properties, meaning they have found it impossible to sell or re-mortgage, ‘while their insurance premiums have risen over 400% in some cases’.
The Ministry of Housing said it does not support the blanket approach to EWS1 forms, which were introduced in December 2019, and that building owners should meet the costs without passing them on to leaseholders wherever possible.
However, it has resisted calls from MPs, flat owners and housing associations to reform the certification process.
The crisis is particularly affecting Londoners. It has been estimated that 2,000 high-rise buildings in the capital alone are yet to have remediation undertaken post-Grenfell, so cannot get an EWS1.
There are less than 300 qualified engineers across the country to carry out the costly inspection, meaning leaseholders in smaller ‘low priority’ buildings have been told to expect a 10-year wait before they will even find out if their building has fire risks and what they might have to pay to fix it.
Today the London Assembly has written to Sadiq Khan calling on him to set up a housing task force ‘with a view to agreeing a common approach’ for obtaining the forms.
The letter, signed by London assembly members Murad Qureshi and Andrew Dismore, calls on the Mayor of London to address the shortage of specialist skills needed to tackle the unsafe cladding issue using the Adult Education budget.
It states: ‘In what has already been an extremely difficult year for our city, we cannot sit by and watch thousands of Londoners be affected by this issue, which leaves them stranded and unable to plan for the future.
‘They are stuck in limbo. Through no fault of their own, these Londoners are struggling financially and mentally and there’s no one helping them find solutions to this vast and complicated problem.’
A spokesperson for the Mayor of London said he has repeatedly called on the ministers to take action to address the shortcomings in the current EWS1 process, ‘which is just a symptom of this Government’s systemic failures on building safety’.
The statement cited the Mayor’s five step plan to rectify the discrepancies in the current system, which includes a long-term funding solution, tracking and enforcing building owners’ obligations to inspect their properties ‘and a new training and accreditation programme to vastly increase the number of people who can carry out safety inspections’.
Housing associations and industry bodies have also called on the Government to intervene.
A Ministry for Housing, Communities and Local Government spokesperson said: ‘We know many leaseholders and building owners are being asked for EWS1 forms unnecessarily, especially for lower rise buildings.
‘There is other evidence that can prove a building is safe, which we would encourage lenders to accept for valuations.
‘We’re also working with professional bodies to address capacity issues in cases where assessments are genuinely needed in order to help resolve this issue urgently.’
What is an EWS1 form?
EWS1 forms were introduced by the Royal Institute of Chartered Surveyors (RICS) in December 2019 to provide assurances to lenders and buyers that the external walls of high-rise buildings are safe.
The form was meant to be for buildings over 18 metres, but at the start of the year the government changed its advice to say all building owners had a responsibility to check their external wall systems (EWS), irrespective of size.
Mortgage lenders have since been demanding them on flat blocks of all heights leaving families trapped in unsellable homes for up to ten years.
There are less than 300 qualified engineers to carry out the inspection, creating a huge backlog with an estimated three million people thought to need one.
Pinnacle Property Management said L’Ecole met building safety standards when it was built but that this is no longer the case after regulations changed following the Grenfell tragedy in 2017,
It said the External Wall Survey was undertaken in line with Government guidance and that this determined remediation was required.
The statement added: ‘As L’Ecole is under 18m, the building does not qualify for an application through the Government Building Safety Fund.
‘Under the Lease terms, legal responsibility for maintenance of the building falls to the leaseholders, and this will include remediation works identified in the EWS.
‘As the appointed managing agent, we continue to work closely with all the leaseholders throughout this process. We do not yet know the costs involved for the remediation work.’
A Peabody spokesperson said: ‘We understand that this is an incredibly worrying and distressing situation affecting leaseholders up and down the country. In this case, we have agreed that Mr Johnson can sub-let his flat.
‘Unfortunately, we are neither the developer nor the building owner and we don’t manage this block. This means that decisions about external works are outside of our control. We’ll continue to do everything we can to support Mr Johnson and others through this difficult situation.’
Get in touch with our news team by emailing us at [email protected].
For more stories like this, check our news page.