What you can do right now to help with the cladding crisis
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.
Leaseholders are being encouraged to use a simple online tool to write to their MP, urging them to increase the level of support being offered to leaseholders affected by the ongoing cladding scandal to help avoid a national economic disaster.
Recent Government announcement - helpful, but falls a long way short
On Friday Robert Jenrick, UK Housing Secretary, announced more help for leaseholders in the ongoing cladding scandal.
He announced 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 cladding repairs.
However, the announcement falls a long way short as cladding repairs are not the only issue
While the Government's announcement addresses the removal of cladding, it doesn’t address any of the other fire safety measures (including “walking watches”) that leaseholders are still being charged for now, or the sky-rocketing cost of buildings insurance for affected properties.
How could the cladding crisis play out?
Covid has financially stretched the entire nation already. But many leaseholders are now facing astronomical bills which will be completely unaffordable for most.
What could happen?
Well, if a large proportion of leaseholders can’t pay for the remedial works, then they simply can’t happen – leaving even the leaseholders who can pay in unsafe buildings.
Mass-repossessions would be a disaster
If repossessions begin to happen en-masse, it means personal disaster for those affected.
But lenders are going to take huge losses too as they’re left to either foot the bill, or sell the flats at massive discounts to those will. We know from 2008 that that can spell disaster for the wider economy, not to mention that a flood of repossessed properties all hitting the market at once drive the price down for the whole of the local market.
This will take money out of every other homeowners pocket, and drive many into negative equity.
We're facing a real potential economic disaster here, affecting millions.
What needs to happen?
So, long story short:
- Leaseholders simply cannot afford to pay.
- Mass repossessions will be personal disasters for those directly affected, and a disaster for mortgage lenders (which may mean serious consequences for the wider economy)
- And the indirect effects of mass repossessions will go much further
An outcome like that is also bad for the Government: When people lose their homes and go bankrupt, they’re more likely to end up relying on welfare.
So what needs to happen?
A Government bailout seems like the only option.
Whether you see it as a bail out of leaseholders, mortgage lenders, builders, or professional indemnity insurers, there needs to be a bail-out. None of those parties can afford to pay.
The sooner the Government come out to underwrite the whole cladding disaster, the sooner people can begin moving on with their lives.
What can you do now to help?
Use this online tool to write to your MP now. This will take you as little as two minutes.
Even if you aren’t a flat owner, this whole thing can still affect you – so take action now. Follow the link below.
Ask your MP to sign @SMcPartland and @Royston_Smith amendment to the Fire Safety Bill, so leaseholders do not have to pay to fix historic fire safety defects. #EndOurCladdingScandal #Cladding #Propertyhttps://t.co/eojsHns3Wc— Yes Homebuyers (@yeshomebuyers) February 17, 2021
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