South London leaseholders caught up in the cladding scandal are selling their furniture to keep up with huge bills.
The rapid spread of the 2017 Grenfell fire, which claimed 72 lives, was found to be caused by dangerous cladding.
Now laws designed to make sure combustible cladding and other fire hazards are removed from buildings have left leaseholders facing tens of thousands of pounds in costs.
Many of their homes are now unsellable as lenders will not offer mortgages until the cladding is removed.
Some blocks were found to be so at risk after External Wall System (EWS1) surveys, a ‘waking watch’ had to be enforced – people who patrol 24/7 to watch for a fire.
The Fire Safety Bill, part of a collection of new legislation that aims to make buildings safer after Grenfell, is set to become law after being the subject of parliamentary ping-pong – the House of Lords wanted to amend the Bill to protect leaseholders.
But this week the Government voted against the amendment for the fifth time, despite some Conservatives rebelling, and the House of Lords finally passed it without any amendments to protect leaseholders from the huge costs.
Campaigners have labelled the Bill “indefensible” and say a generation of homeowners face financial ruin.
The Government has set aside £5 billion to fund remediation works on buildings, while it is also consulting on a £2 billion developer tax.
But current estimates suggest the true cost of the works could reach £15 billion or above.
There are also issues with what the funding covers – it is unlikely to cover all necessary works to make buildings safe, while only blocks of 18 metres and above are eligible to apply for it.
And now leaseholders, despite not owning the freehold to their building and not being responsible for the dangerous material used to build it, fear they could lose their homes or go bankrupt.
Emma*(not her real name) lives in Norfolk House in Deptford. She bought part of her flat under a shared ownership scheme nearly five years ago.
Galliard Homes built the development, while the block of 58 flats is managed by Optivo. The remediation works to make the building safe are set to cost £3 million, while the waking watch enforced after the EWS1 survey cost leaseholders £74,000 per month.
Residents were informed about the work and costs via a letter from Optivo in March last year. Despite only owning a portion of the flats, those on shared ownership will be liable for 100 per cent of the costs.
Emma highlighted how residents on shared ownership schemes get on them because they cannot afford market rent, suggesting there was “no way” they could afford the extra costs.
“We received that letter at the beginning of the pandemic. We were working from home, already extremely stressed,” Emma said.
Communication has been a “massive problem with Optivo”, historically and now, and residents were left with “scant” information at an incredibly anxious time.
“We were told we were going to have a waking watch in the building when everybody was really freaking out about Covid.
“Then they told us you’re going to have these people in your building 24-hours a day.
“We wrote to them and called them straight away. For three months there was no answer from them at all – no one let us know anything,” Emma said.
There were also problems with the waking watch, with residents reporting workers not social distancing and not wearing masks.
“They used to leave those doors open and block the fire exits. It was completely insane,” Emma said.
After a long process of trying to get information, Optivo agreed to meet with leaseholders once a month.
“The meetings have been really poor. They go to the meeting and the only information they provide is ‘we reserve our right to pass this [the cost of repairs] to leaseholders’,” Emma said.
Optivo also promised to give itemised bills for the costs, but did not, offering only a redacted – seemingly with Tipp-Ex – bill.
A spokesperson for Optivo said “we provided residents with evidence of the waking watch costs, in accordance with the law”.
On top of the financial concerns, people are still living in dangerous conditions.
“The fact that the cladding is still there is frightening. The problem is the insulation material and the balconies have timber wood. How can you feel safe like that?”
Optivo said it will “continue to vigorously explore all options” to recover remediation costs.
A spokesperson said the company “sympathises” with leaseholders, has always tried to be “open and transparent”, and will “continue to lobby Government” to make funding available.
“We’ve always been clear Optivo will only pass on costs to leaseholders as a last resort, after all other options have been exhausted,” he said.
Leaseholders in a Lambeth housing estate are facing the same anxieties.
The development, built by Barratt Homes, had an EWS1 survey done in February 2020. It revealed widespread fire safety defects.
A fire engineer assessed that the development would have to change from stay put to evacuation. London Fire Brigade was informed and last July the development was given hours to either implement a waking watch or evacuate everyone.
The waking watch needs to be in place until a fire alarm system is installed, and while the management agent– after another fire risk assessment – changed the commissioned company and reduced the team from five to three, it still costs £450,000 a year.
Martin Gerhard, who owns a third of his flat, said: “I’m now in a situation where my service charge is over double what my mortgage is.
“None of this was our creation – why should we have to pay for a mistake that Barratt made?
“The scary thing about it is that what we’re going through now is the tip of the iceberg.”
The cladding alone has been priced at £6 million, while there is more to fix.
Daisy Connor, who owns 30 per cent of her flat, said the remediation works could end up costing “more than the actual equity of our flat”.
Another concern for people is going bankrupt because in some industries that can mean losing your career.
Jennie Rowland, who is self-employed and works in finance, lost her safety buffer to pay these huge costs.
“Just say the worst happens and I’m unemployed and I become bankrupt, that means I cannot work in my industry anymore. That means my career is gone as well,” she said.
Benedict Lam, who also lives in the estate but in a block under 18 metres, said the situation is “outrageous”.
“They knowingly built something defective, got away with it, and now they say ‘we don’t want to know about it’,” he said.
Mark Allen, who worked for the NHS for nearly 40 years, said: “I’m retired so I took my pension, most of which is now spent on the additional service charges I need to pay.
“My whole retirement plan is gone in the wind.
“But this isn’t just about money, it’s about our safety. Is it going to take another Grenfell before something’s done?
“People are having sleepless nights, worried about their kids, and then having to make choices about what they spend their money on – school uniform or the service charges? Do they put a roof over their head or buy their kids decent food?
“These are choices that people should not have to make when they’ve been forced into a situation that’s not of their making.”
Barratt Homes, which is worth billions, has also been deleting negative reviews on Trust Pilot from leaseholders.
Martin said: “I’ve got residents contacting me saying that they’re selling their furniture to pay for these bills.
“I’ve got residents telling me that they’ve cut back on their food, on their electricity – they’ve got kids, and yet Barratt still won’t take any sort of responsibility for this when people are really suffering. It makes me sick to the core.”
The leaseholders want Barratt to offer to pay for everything that is not covered by the building safety fund.
A spokesperson for Barratt said it “appreciates how concerning” the difficulties facing leaseholders and residents are.
“The development was built in 2009 and signed off as meeting the requirements of building regulations by an independent approved inspector at the time of construction.
“However, while we have no legal liability, we do take our responsibilities as the original developer very seriously.
“We have been working to assess and understand the issues at the development and are committed to working with the managing agent and freeholder to help them find a suitable solution for leaseholders and residents,” she said.
In Southwark, Helen Beedham lives in Antonine Heights in the City Walk development. It was built by Galliard about 14 years ago and has received the worst fire safety rating possible with several defects identified.
“In December LFB imposed a waking watch. We’ve been living with that ever since – it costs us about £6,000 a week,” Helen said.
Their management agent has applied to the London waking watch fund and the building safety fund.
“However, we’re already seeing the financial, practical and emotional impacts of all of this.
“A number of us – we have a recently formalised residents association – spend hours every week on this matter. It consumes our lives,” Helen said.
There is no certainty around what the Government support will cover, while a lot of buildings have been told they are ineligible.
“And it’s the emotional toll, it’s a really damaging situation for people’s mental health. We live quite close to Guy’s Hospital and have NHS staff workers in our building,” Helen said.
She and other leaseholders “categorically feel that the Government really needs to step up, understand the scale of this issue, and get a grip on the data about who’s affected, but also what the levels of risk are”.
“This is a long-term, industry-wide problem. Its roots lie in poor quality buildings, building regulation sign offs that shouldn’t have happened – we know that our building actually didn’t meet a couple of regulations at the time of sign off when it was originally built.
“The other major issue here is the whole system of leaseholder law, which effectively allows freeholders to say this is necessary work, it has to be done and you have to pay.
“For buildings like ours that are over ten years old, we’re past the statute of limitation, we have no legal recourse to ask the builders to contribute towards remediation.
“We’re playing against massive corporate companies who also fund political parties. It’s like David and Goliath,” Helen said.
She praised her local councillors for the work they are doing to support leaseholders and her Labour MP Neil Coyle.
Mr Coyle, who has been proactively reaching out to hundreds of affected leaseholders, has heard “genuinely horrific” stories, including people losing their homes.
He told the local democracy service that the Government should first apologise for a situation that has got “out of control and needlessly delayed”.
Mr Coyle said there should also be VAT exemption on Government funding.
“The Government has said it put £5 billion in the pot but 20 per cent of that gets lost on VAT before you even start paying for these works.
“I’ve asked the Government if a [funding] application was granted, but they can’t commission the works by the end of September because there’s going to be an explosion of commissioning requests for construction work – and we know that Brexit for example has dented the workforce availability – will all of the works be able to be commissioned in the timeframe allowed?” he said.
Lewisham and Deptford MP Vicky Foxcroft has been arranging public meetings, inviting all bodies involved, to try and get leaseholders some answers.
She said there has been a lot of passing the buck, with no one willing to take responsibility.
Berkeley Homes has outright refused to meet privately or publicly. The developer is behind Aragon Tower in Deptford, where the fire breaks system was found not to be working
“When challenged Berkeley Homes refused to take any responsibility. Many residents are stuck and unable to sell,” Ms Foxcroft said.
Berkeley Homes has declined to comment.
As well as the implications for leaseholders, Ms Foxcroft warned of the knock-on effects on social renters if the Government or developers do not pay for the remediation works in full.
“We still want housing associations to be able to build more affordable homes and if they try and meet all of this they won’t be able to afford cheap rents,” she said, adding that the developers are “seemingly getting away pretty scot-free at the moment”.
A Ministry of Housing, Communities and Local Government spokesperson said the Government has been “clear throughout that owners and industry should make buildings safe without passing on costs to leaseholders – and we will ensure they pay for the mistakes of the past with a new levy and tax to contribute to the costs of remediation”.
“For lower-rise buildings which have a lower risk, our generous capped finance scheme will ensure bills are a maximum of £50 per month,” he said.