Relief for leaseholders as Government finally announces intervention on cladding scandal
We give market commentary when journalists or news outlets approach us directly for comment on specific topics. We share our commentary here too. See below.
At long last, the end is in sight for the UK’s cladding scandal with today’s announcement by Robert Jenrick, UK Housing Secretary. His announcement highlighted the following:
**UPDATE: 17th Feb 2021, 9.20am:
Thanks for the huge response on Twitter to this article. Clearly some of our analysis here is jumping the gun and there are still a lot of battles to be fought before the cladding crisis is over.
We're waiting to speak with a couple of people leading the #EndOurCladdingScandal campaign so we can learn more and get behind it.
This article will be updated/amended/changed in due course but we're leaving it live in its original form for the mean time for the sake of the debate it's fuelled.
Original article is as follows:
Government action at last
At long last, the end is in sight for the UK’s cladding scandal with today’s announcement by Robert Jenrick, UK Housing Secretary.
His announcement highlighted the following:
- Leaseholders in high-rise blocks (classed as buildings over 18 metres tall – which is about 6 metres) would not have to pay anything towards cladding repairs
- Leaseholders in buildings between 11-18 metres (about 4-6 storeys) would have to pay no more than £50 per month towards repairs.
Although more could be done, this is a massive step in the right direction and we’re delighted for leaseholders to hear today’s news.
Inevitable conclusion, but took long enough
The Government was always going to step in and resolve this eventually – it was the only option. There was no way leaseholders were going to be expected to pay tens of thousands for mistakes made by builders, government, and regulators.
But it’s extremely disappointing it’s taken so long. Most flat owners have been unable to buy, sell or remortgage their properties for over 12 months now.
This kind of disruption is unheard of in the housing market, with hundreds of thousands of people affected, and having to change their plans and work around this.
We've had record numbers of enquiries from homeowners trying to sell their property fast and force a move to happen.
It should never have come to this – but better late than never.
Mortgage lending is key now
This Government announcement is one thing, but the reason the cladding issue has stalled the market so much is because banks weren't comfortable lending for a couple of reasons.
For one, if their new borrowers were going to end up with an enormous bill they'd struggle to pay the mortgage.
Secondly, if a flat got landed with a £15k repair bill, the flat would effectively be devalued by at least that much - meaning more risk for mortgage lenders.
Now that the Government have announced their plan, hopefully mortgage lenders will now follow with positive statements and lending will begin on these properties again shortly.
The market for flats can then begin moving again, and leaseholders who’ve put their plans on pause for so long can start moving on with their life again now.
Hopefully this news comes sooner rather than later.
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