The Society of Licensed Conveyancers has accused the government of not taking the cladding issue seriously enough and warns that its inaction will cause a lack of available homes in the future.

The property lawyers’ body wants the government to pay for all remedial costs to protect those owners and leaseholders of high-rise apartments affected by safety issues following the Grenfell tragedy. John Clay, a board member and past chairman, has written an open letter to Housing Secretary Michael Gove asking it to step in and then claim money back from the developers who are responsible for the current mess. 

Insufficient help

It points to a recent survey that showed many leaseholders who cannot afford repairs or are unable to sell their flats are suffering from severe depression and that 23% are seriously contemplating suicide. “When so much of the current conversation is about levelling up, this cannot be right,” says Clay. “If insufficient help is given, probably hundreds of thousands of leaseholders will have to forfeit their flats to their freeholder or their lender.” 

He explains that prosecution by leaseholders against developers is unrealistic as cases would be complex, involving huge legal costs, and warns that if the government does not step in, the value of all flats in high rise blocks could be blighted for years to come. The situation is already creating a problem in the housing market because most of the properties involved are first time buyer occupied. “As these are currently unsaleable there will be a shortfall of entry properties for first time buyers, which will cause prices of other flats in low rise properties to increase, making it even harder to get onto the property ladder,” says Clay. 

“It is a very complicated situation which we would suggest your department has not previously taken seriously enough.” 

1 COMMENT

  1. When will the whole cladding issue be described CORRECTLY.
    It is not a cladding issue it is a general construction defect problem 45 years in the making.

    Granted it has taken the cladding issue to reveal the construction defects.

    The construction industry with all it’s constituent parts which includes Govt is responsible for the current debacle.

    Very poor construction standards have led to millions of flats being worthless.

    This could cause a run on the banks.

    Millions of worthless properties means millions of worthless mortgages.

    Leaseholders WON’T pay remediation costs.

    Freeholders will repossess and have to pay remediation costs to make the flats worth anything.

    Leaseholders will have to go bankrupt of face being pursued by lenders for up to 12 years before the mortgage debt is Statute Barred from recovery.

    Going bankrupt stops future debt collection.

    Many leaseholders will have little alternative than to go bankrupt.

    If there are 2 million defaulted mortgages banks will turn to Govt for ANOTHER bailout.

    If Govt DOESN’T pay upfront to fix all the flat construction defects to restore full market value there could be a collapse in the property market.

    Personally you couldn’t pay me to buy a flat ever again.

    Even if they have an EWS1 form.

    Fortunately my flats have gone from zero value to full market value in the space of a month when my block was given a successful EWS1 form even though technically it no longer needs one being below 18m.

    Lenders however are still justifiably very nervous and are refusing to lend on flats without an EWS1 form.

    A local EA refused to market my flats without one.

    Had I not achieved an EWS1 form then I would have handed the keys back to the lender and filed for Personal Bankruptcy.

    I don’t have a residential property but most LL do so they don’t really have the choice of going bankrupt as a lender would take their home to cover Defaulted BTL mortgages etc.

    Best thing to do is for LL to sell their home to a trusted 3rd party who will let them stay.
    Then go bankrupt.
    Get discharge after one year and hopefully buy back their home.
    But all very difficult.

    Unless the Govt pays for all construction defect remediation then millions of flat owners face bankruptcy and homelessness and loss of careers and livelihoods.

    Govt needs to get a grip and realise that for a trifling £50 billion it can save the banks and the property market.

    That is how much it has been projected it will cost to fix every defect.

    If Govt DOESN’T do this they will lose the next GE

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