This post explains the financial and safety challenges affecting millions of home owners across the UK. Safety issues which have been further complicated by a pandemic. In response to concerns of foul play by my neighbours I’ve been putting my product hat on and started exploring data that can help highlight the scale of these issues with the goal of educating and connecting other leaseholders similarly affected by issues most were not responsible for.
Setting the scene
Whilst many leaseholders will have detailed home surveys conducted when they buy a high rise apartment it is unheard of for people to have detailed intrusive surveys conducted on the block in order to satisfy their own curiosity or those of their lenders. Any issues with the external facade of the building is typically the responsibility of the freeholder, or the original developer (whom may be the same company), and any issues between the external and internal walls are hidden.
I live in, and formerly managed, a residential apartment block that we recently discovered has increased fire risks caused by internal and external construction issues. As a result I’m experiencing first hand the trials and challenges (financial, emotional and impact to mental health) that go with living in a block with known building safety issues. From neighbours leaving unattended candles outside their apartment door and obstructing my only fire exit, to insurers unfairly demanding a 14x increase to their building policy premium, and then fellow leaseholders looking for someone to blame for their increased living costs – the struggle is real. Although the UK Government has repeatedly stated that the cost of remediation work should not fall on individual leaseholders in affected private blocks, the cost of fixing this problem spans much further than just remedial work.
Where did the problem start?
Whilst these problems have been going on for years, they made the headlines back in June 2017 when a fire broke out at the 24-storey Grenfell Tower block in West London – caused by a malfunctioning kitchen white goods appliance on the 4th floor. The fire spread rapidly throughout the building and was made worse by well documented concerns with the buildings construction and inadequate fire safety measures. The devastating fire took the life’s of 72 residents and injured over 70 more.
“The Grenfell Tower Inquiry began on 14 September 2017 to investigate the causes of the fire and other related issues. Findings from the first report of the inquiry were released in October 2019 and addressed the events of the night. It affirmed that the building’s exterior did not comply with regulations and was the central reason why the fire spread, and that the fire service were too late in advising residents to evacuate. A second phase to investigate the broader causes began on the third anniversary in 2020.“ [1]
Following the Grenfell Tower disaster, there have been concerns around how many other high rise residential buildings have a similar construction, and when could this tragedy strike again.
How is the problem complicated?
There is a lack of data and understanding around how many multi-occupancy residential blocks are affected by similar fire safety issues and what data is being shared highlights that not all blocks are being treated equally when it comes to their relative risks.
In December 2019 the government introduced an EWS1 form to help lenders understand the risks associated with multi-occupancy high risk residential buildings above 18m. Overnight millions of homes in the UK became unsellable as lenders refused to issue mortgages on properties without an approved EWS1 form – valuing the properties at £0 due to the uncertainty around the associated risks and remedial costs. Further, those with an existing mortgage often found themselves unable to change lender when their fixed mortgage term ended – meaning they were unable to accept the best financial rates and were financially discriminated against for an issue that was not there fault.
Add to this, in March 2020 the insurance market suddenly became spooked by COVID-19 and many insurers closed their insurance books and/or pulled out of the market for the rest of 2020 resulting in less competition and huge hikes in building insurance premiums. Many high rise residential blocks found increases of 5-10x their previous renewal prices, and some as high as 15x. At the block I’m in the premium rose from an average of £36,000 to £465,000 and then £548,000 in the latest renewal. This added a material impact of £5,000 per year to my living costs at a time when job security is anything but certain. Other blocks found themselves unable to secure a renewal, and having to either self-insure, or add 24 hours waking watches and other costly fire safety measures.
To date the government has pledged £5 billion to fund remedial works to buildings to remove unsafe cladding on buildings over 18 metres tall – but the true cost to complete this work is likely to be triple this cost. Access to qualified fire safety specialists and companies able to support the remedial work is a challenge for all – and made worse by COVID restrictions. And to add to those challenges remedial costs are escalating as those specialists fire and construction companies realise their skills are in demand.
So how big is the issue?
The government has collected data to understand the scale of the problem – but none of this data has been made public. A few volunteer groups and media outlets collecting data which is showing the scale – check out https://claddingscandalmap.co.uk, UK Cladding Action Group and @GeorgeRobMarting at @WhichUK on Twitter for three examples.
To avoid conflicts of interests with my current employer I’ve avoided collecting data from other blocks at the moment, but was curious to explore how many blocks could be affected by similar issues. Looking at E14 London as an example, I have mapped sales data to see if you can identify
- multi-occupancy residential blocks (which isn’t available as a single data set)
- blocks which likely have issues selling, which could therefore be related to attaining an approved EWS1 form
Adding to this I’ve then overlaid London Fire Brigade call out data to investigate blocks that may pose a higher risk due to historical fires.
You can explore these dashboards in my Tableau Public Gallery:
- Apartment Sales in E14 London since 1995
- Primary Fires in London E14 since Jan 2017 (which I’m looking to overlay on the first dashboard)
You can also a preview of this in action in this video:
…which features a building (New Providence Wharf) that 4 days after posting the above tweet had a fire affecting multiple apartments:
As you’ll note the scale of this issue is huge across the UK, and the impact is not just remedial costs. Whist the government may claim it will avoid leaseholders having to fix a problem that was not their doing, it is clear that many leaseholders have already been financially impacted, and for others the impact goes beyond simply financials and extends to health and wellbeing.
If you are aware of, or working on, other data that can help to highlight the scale of these leaseholder issues then I’d love to hear from you. Please leave a comment or connect with me on Twitter.
[1] https://en.wikipedia.org/wiki/Grenfell_Tower_fire
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