Written evidence submitted by Mr Mannan Contractor [BSB 091]
As a leaseholder in a shared ownership property, I object strongly to the building safety bill in its current form. The draft building safety bill rightly acts, in principle, to improve building safety and construction. The practical financial implications of the draft however leave much to be desired, given that it places the largest costs burden on leaseholders, who have no responsibility for historic construction defects and building safety failures. The draft fails to define ‘affordable costs’, does not legally protect leaseholders from potentially massive bills being passed on to them by developers/freeholders/housing associations, and creates an unjust parallel service charge that could potentially result in increased cases of forfeiture, bankruptcy and eviction for leaseholders. Leaseholders are the most likely to suffer from the outcomes of poor safety, and yet are now being asked to carry the financial burden of remediation while not being in any way responsible for the safety standards applied to build and maintain their homes.
When I purchased my share of my property, I was assured that through both the conveyancing process and the various new build guarantees (NHBC etc) that my home was both built to a high, certainly satisfactory standard and was safe to live in. Recent changes in policy and standards now however mean that apartment blocks across the country have been shown to have been built far below the necessary safety standards, on grounds of flammable non-ACM external cladding, balconies and insulation, and inadequate cavity barriers. This is true of the building I live in too, which received a B2 on the EWS1 due to timber cladding, timber balconies and flammable insulation in some external walls. A recent Inside Housing survey of leaseholders has revealed that 89% of their buildings (103 out of 116) have failed the External Wall Survey (EWS1). The fire risks uncovered by the EWS1 do not cover internal historic defects e.g. fire door defects, absence of sprinkler systems etc., which the building safety bill will cover.
Where the true – and what increasingly looks to be vast - scale of the problem arising from decades of lax safety regulations and unchecked construction industry practices is not yet fully known, it is clear that the government’s current approach is wholly inadequate and misdirected. Not only is the available funding in place far below true estimates of what is required to truly prioritise building safety, there is also little actual consideration of the cost implication for remediation work. This is reflected in the draft building safety bill. The vague moral imperative to keep costs down for leaseholders is no assurance at all, not least given the legally binding leases that mean leaseholders are responsible for all maintenance, repair and improvement costs. This is compounded by the absurdity of the draft bill in couching the safety charge as a parallel service charge costs for work that may be determined autocratically by developers/housing associations at no set cost limit or subject to audit beforehand, payable by leaseholders within 28 days.
Where home ownership has been the goal of many people like me, who have worked hard and honestly all our lives, any decent person can see the rank injustice underpinning both the cladding issue and the draft building safety bill. It is grossly unfair to expect us to have to pay for the necessary safety improvements due to factors far beyond our responsibility. In many instances too, properties are on their third or fourth owners. How is it fair that a severe financial burden can be levied on current residents based only on the fact that they happen occupy the property at this time? In all instances, purchases have been made with the belief that their homes already met the necessary safety standards. A good analogy for this would be if one purchased a brand new car that was later found to have safety problems. Consumer protections would mean that the manufacturer issues a recall on the vehicle, repairs and makes safe at their expense and allows the owner to enjoy peace of mind and safe motoring. Why does the same principle not apply to homeowners given that buying a home is the largest and most important purchase people will make in their lifetimes?
I have been living in my flat for just over 10 years now. I have owed 100% share from my housing association in 2018. I was a first-time buyer in 2009 when I purchased my home. Since then, my neighbours and I have had to deal with a litany of problems caused by poor and sub-standard construction in our development - regular outages of hot water supply and on occasion total loss of water supply, failing disabled lifts, issues with access to our homes, restrictions on movement within our gated development as we were deemed “social housing”. To add insult to injury, our service charge has more than doubled in the decade we have been living here. This increase in costs, I am highly vulnerable patient having health issues and I am stressed out due to ongoing covid 19 and the cladding issues, I want to sell the property and I cannot due to the cladding EWS1. Now unable to sell to pay off these costs (even if at a loss), unable to re-mortgage and faced with the prospects of even higher costs on the exploitative rental market, this legislation in its current form stands to destroy the lives of up to 4.3 million residents, myself included.
With many people across the country already financially stretched with increased rent, service charges and cost of living due to the now well-documented exploitative practices endemic in the leasehold sector, to further add thousands of pounds of remediation costs would almost certainly consign an entire generation to financial ruin and deeply discourage/prevent access to affordable home ownership to the next generation. Shared ownership in this instance is no protection either, the flawed system of shared ownership leaves the full burden of all costs legally on the “owner”, even if their share is minimal, as they in fact own nothing of the property or land but are responsible for all liabilities.
The government’s own estimates for bringing buildings up to standard range between £9,000 to £78,000 per leaseholder, with no actual legal upper limit, it begs the question ‘in which universe can these sums be classed as affordable, particularly for those in affordable housing?’. It is also worth asking: How is the construction and housing industry – currently falling well below both moral and professional standards, as evidenced most viscerally by the Grenfell inquiry – going to be compelled to take ownership of safety issues if the government passes through bills like this that just allow eventual costs of their shoddy construction to be passed down to leaseholders?
The passing of this legislation in current form, alongside the seriously flawed shared ownership system and the long-denounced leasehold laws means ordinary hard-working tax payers are being asked to pay for the failings of previous governments, profit motivated developers and ineffective housing associations. If passed, the bill would ultimately represent yet another rung in the bottom of the ladder being demolished in what is already a thoroughly broken housing market.