The Crisis of Flammable Cladding in Residential Towers: The UK’s Housing Nightmare with ‘Mortgage Prisoners’

Who will pay? In the world of “tenants” and “free owners”.

by Nick Corbichley, For Wolf Street:

Imagine you own an apartment in a tall building that has suddenly become a fire trap. Then, you discover that you and all of your neighbors will have to pay tens of thousands of pounds each to replace the flammable insulation and cladding on the outside of the building. You cannot sell the apartment because the lenders are refusing to write a mortgage on the apartment. To curb that, in the midst of the global recession – you will have to pay hundreds of pounds a month – plus mortgage payments and other costs – to cover the costs of the round-the-clock fire patrol to make sure the building you occupy does not suddenly catch fire.

This nightmare scenario is becoming increasingly common among apartment renters in the UK. After 72 people died in a fire on June 14, 2017, in the 24-storey Grenville tower in London that was fitted with highly flammable insulation and cladding, similar materials were detected in thousands of towers across the UK. And the lives of apartment owners in smaller buildings are turned upside down because their blocks were built with unknown or dangerous materials.

So firstly … ‘rental’ arrangements are still common in England, particularly in relation to apartment buildings with some land use and communal buildings. When an apartment is bought as a rental property, the buyer is really nothing more than a tenant, albeit with a lease that usually lasts for up to a century. The “freehold” – the building and the land – is owned by another person, usually the developer or another entity that the developer has sold to him, and they are able to extract annual rent on those assets. Rental terms have become Increasingly cumbersome Global investors bought “freehold”. The government has finally come under at least disgrace for its pledge to change this old system.

New fire safety rules and regulations that came into effect after the Grenville fire, although largely welcome albeit decades overdue, have sparked a host of unintended consequences for the UK apartment market.

Mortgage lenders refused to make loans for any properties in high-rise buildings that have been marked as fire traps or have not yet been examined but could prove to be pyrotechnic traps. As a result, the vast majority of high-rise apartments in the UK, which are at the bottom of the real estate ladder, are impossible to buy or sell at the moment.

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This could eventually lead to serious problems at the top of the stairs. Warn Eric Lenders, Managing Director of Personal Finance at UK Finance: “The entire real estate sales chain could collapse if one part of that chain couldn’t get its shape: It’s not just first-time buyers, it’s the second step, it’s the driver. We don’t know the size. The problem is now. “

The Financial times He cited an estimate from the End Our Cladding Scandal group that eroding confidence in building safety had created 1.93 million “mortgage inmates” in England. last week, The Daily Telegraph, Using data from the New Build Database, I suggested That as many as 4.5 million buildings could be affected. Since then, the Royal Institute of Chartered Surveyors has made proposals aimed at reducing this number.

Most of the buildings have yet to be inspected, leaving millions of tenants in financial trouble. Those whose buildings are already deemed unsafe have to pay hundreds of pounds a month, in the midst of the global economic crisis, to cover the additional service costs of having 24-hour firefighting patrols on their buildings. For some, the costs are too high.

For those who haven’t checked the building, the wait is endless. The logistical mess caused by the intermittent shutdown of the British economy hardly helps. The lack of trained inspectors is also not: Before Christmas, there were fewer than 300 fire safety professionals qualified to sign forms across the country.

In addition, no one wants to cover the costs of inspections and, if necessary, repairs to buildings. Total costs are expected to total £ 15 billion to correct safety issues in all affected buildings. But the government has so far pledged just £ 1.6 billion. Tenants argue that the freedom holders and developers must bear the costs of making the buildings safe. But for now, building owners can pass the costs, which can be as much as £ 40,000 per apartment, to residents. And many of them.

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That could change in the coming months. In November, the House of Lords passed three amendments to the Fire Safety Act, which included a ban on compelling tenants to pay. But these amendments will have to pass the bill to the House of Commons.

The Grenfell fire could have been avoided completely. Finally, positive change may come from him. After two and a half years of hearing the evidence, the Grenfell investigation still in progress identified three main reasons for the building with highly flammable materials:

1.Gross neglect by Grenfell’s Building Control Board, Kensington, and the Chelsea Tenant Management Organization (KCTMO). Grenfell’s inquiry provided unprecedented insight into how the UK construction industry places profit above safety. Determined to cut corners in their renovation of Grenfell Tower, landlord, KCTMO, Transformation Zinc cladding panels are an expensive alternative to aluminum, saving themselves about £ 290,000 in costs. This became the main reason for the spread of the fire, which killed 72 people.

2. Manipulative safety tests and fraudulent product claims by the three manufacturers, Celotex, Kingspan and Arconic. Celotex (from France) and Kingspan (from Ireland) manufacture and sell insulation installed in Grenfell. Arconic (from the US) manufactures and sells cladding that has been wrapped around it. In all three cases, commercial interests appeared to outweigh all other considerations, including safety. Two companies were sued, along with appliance manufacturer Whirlpool, which produced the refrigerator that allegedly started the fire, in the United States, but the class-action lawsuit was dismissed on the grounds that it would make sense to try the case in the UK.

All three companies (Celotex, Kingspan, and Arconic) The investigation has shown her To rig fire safety tests in order to obtain certification of highly flammable products for use in tall buildings. The internal emails also revealed that employees at all three companies are aware of the enormous safety risks their products pose but are selling them anyway.

One example: In 2015, when Arconic’s Reynobond PE cladding was installed to the Grenfell façade, Claude Whirl, former CEO of the company wrote in an internal email that the material was “dangerous to the facades, and everything should be moved to FR [fire resistant] Out of necessity. ”He noted that this opinion is“ technical and apparently non-commercial, ”adding a smiling face, in an e-mail message previously revealed by the investigation.

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Wirl is one of a number of Arkonic workers who refused to appear as a witness to the investigation. Another, Claude Schmidt, who is the president of an Arconic affiliate, was alleged to have told the investigation team that he would only appear if he could choose which questions to ask him.

3. Widespread Inefficiency and conflicts of interest evident in government and normative bodies, Including the British Research Foundation, the British Standards Institute (BSI) and the British Council for Agricultural Purposes (BBA), all of which were privatized in the years before the fire. The Labor government also played a large role in paving the way for the Grenville Fire unblock On the flammable insulation of high altitudes in 2006. Even after the 2009 Lacanal House fire revealed the fatal consequences of its flammable exterior panels, it refused to reverse course.

So far, the only people who have paid dearly for the fire – along with victims, their relatives and survivors, some of whom are still waiting for permanent resettlement three years after the fire – are the millions of renters who, through have no fault on their part, are now trapped in a financial predicament. . Many of them are trapped in dangerous buildings. by Nick Corbichley, For Wolf Street.

There is “unprecedented space across the western edge”: Rhett Shaftsbury plc is grappling with a new reality. Read… With short-term tenants faltering and immigration, and people moving to “work elsewhere”, the number of vacancies for apartments in London soars, rents fall

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