Cladding flat values slashed

Cladding flat values slashed

A FLAT owner in New Capital Quay in Greenwich discovered their property’s value has fallen from £475,000 to £50,000 due to the building’s fire risks.

Earlier this year, the complex was found to have ‘multiple’ fire safety issues. The 11 blocks are home to around 2,000 people, and ‘more than a dozen’ concerns were identified, not including that the buildings are clad with panel combinations that failed the government’s fire safety tests. A deficiency notice was issued by the London Fire and Emergency Planning Authority (LFEPA), which discovered defective fire doors, missing fire stopping, ‘dangerous’ fire escapes and holes in plasterboard meant to act as compartmentation to ‘stop the spread of flames and smoke’.

In total it identified 16 fire safety concerns, including a ‘lack of arrangements’ for evacuating vulnerable and elderly residents. An ‘ineffective maintenance regime’, broken firefighting lift and fire hydrant were also mentioned, LFEPA stating that ‘procedures to be followed in the event of serious and imminent danger to relevant persons are inadequate’, while 30 fire marshals continue to patrol 24 hours a day at a cost of £25,000 per week.

Galliard Homes, which owns the site, responded that some defects ‘had been addressed’, and that there had been ‘no issue with missing fire-stopping material, just an error during the inspection’. Residents were worried they would have to pay the estimated £20m to £40m bill, or around £20,000 to £40,000 per flat, while they also faced a £1.25m bill for the ‘round-the-clock’ fire warden patrols.

The company planned to sue the National House Building Council (NHBC) over ‘who pays for cladding that was certified as compliant with building regulations at the time of installation’, but have since ‘been deemed to have failed fire safety rules’.  The Guardian has now reported that a resident discovered her home’s value has fallen from £475,000 to £50,000 as a result of the cladding.

She stated that ‘it is like someone has taken away our life choices, our freedom. And nobody is doing anything about it’. The dispute ‘could take years to resolve’ between Galliard and the NHBC, with ‘potentially thousands’ of other owners nationwide left with ‘an unsellable flat’. The value change came after a RICS (Royal Institute of Chartered Surveyors) approved surveyor assessed the resident's apartment for her as she hoped to upsize, and she noted that the ‘whole complex is blighted’.

She added that ‘all ongoing sales in the development have fallen through. Banks are not lending to potential buyers and provide valuations of zero for flats in our development. I don’t sleep at night. I wake up most nights for a few hours and I write emails to people I think that can help. I can’t move very fast. What would happen if my husband was away one night? We are on the seventh floor. What if I was there with my son and new baby and all the people were at the stairs and I couldn’t get out?’.

Chris Haan, a lawyer for law firm Leigh Day, has been approached by a number of homeowners in New Capital Quay, adding that ‘it is quite shocking that the residents are living in potential death traps while everybody else tries to deny liability for the cost of making them safe. There is the potential for the residents to bring group legal proceedings to recover the cost of fixing the buildings and for the considerable distress they must be suffering’.

He pointed out that they might have a case against Galliard Homes for breach of contract when they sold homes ‘fit for habitation when completed’, while the resident pointed to the fact that many of the homes were likely purchased under the Help to Buy    scheme, as it was ‘heavily promoted’ at the development’s launch. This would mean that the government might lose large proportions of its loans to residents. Galliard Homes declined to comment on the story.

A spokesman for the Ministry of Housing, Communities and Local Government said: ‘We have made clear that we want to see private sector landlords follow the lead of the social sector and not pass on the costs of essential cladding replacement to leaseholders. We are keeping the situation under review and ministers are meeting industry representatives shortly to discuss this.’

Martin Boyd, a trustee of charity Leasehold Knowledge Partnership, stated that the cladding issues nationwide were causing ‘financial ruin’ for homeowners, adding: ‘The blight caused by Grenfell is national and the government doesn’t seem to be too bothered about that. So far, what we have heard from Greenwich and Croydon is just the tip of the iceberg.’