The cost of flats in the UK has halved as buyers are concerned about dangerous cladding – comparable to what was used at Grenfell Tower.
Some flat owners have also been left with properties that they cannot sell, after fears over fire risks and unsafe constructions. The Land Registry shows that flat transactions worth £1.6billion were lost in September 2020 demonstrating the impact safety concerns are having on the market. Further, the Leasehold Knowledge Partnership also reported that in September, the number of flats being sold fell by 48%, compared to the same month in 2019.
The findings come after it was reported that many flat owners could face bills of thousands of pounds to replace unsafe cladding, under proposals by the Government. Ministers have ringfenced £1.6 billion to fund the repairs, but MPs believe the work could cost over nine times as much, at around £15 billion.
Last year, the Government appointed an external advisor, Michael Wade, to recommend how best to protect leaseholders from crippling costs, without further burdening the taxpayer. In December, the advisor informed the All-Party Parliamentary Group on Leasehold Reform that long-term loans were being considered, but said it was up to MPs to determine who paid for the loans.
Sebastian O’Kelly, of campaigners Leasehold Knowledge Partnership, said: “The Government is poised to dump £15 billion of loans on the innocent parties and we believe that will make thousands of leaseholders homeless and result in a property crash.”
On Monday 1 February, Labour’s motion calling for the Government to establish a new cladding taskforce, that would make buildings with dangerous materials safe and protect leaseholders from the costs, was supported by 263 votes to zero. This however, does not compel ministers to act as it is not legally binding, although at last week’s PMQs, the Prime Minister said that the Housing Secretary Robert Jenrick would be bringing forward a plan to tackle the crisis “very shortly.” As pressure mounts, we await to see what plan will be introduced to tackle this situation.