Is the UK’s Cladding Crisis About to Get Even Worse?

As the UK government prepares to pass its Fire Safety Act, concerns are growing that it could leave even more apartment owners in limbo.

One of the most brutal aspects of the Grenfell fire disaster is the sheer number of victims it has left in its wake, who now count in their millions. First and foremost, of course, are the 72 residents who perished in the blaze on June 14, 2017, and the loved ones they left behind. Then there are the hundreds of residents who managed to survive the inferno but lost their homes. Many had to wait years for rehousing. Then came the legions of indirect casualties: the millions of leaseholders* who discovered after the disaster that the buildings in which they own their flats may have also been rigged with flammable cladding and insulation materials.

Through no fault of their own, they have found themselves trapped in apartments they cannot sell. In buildings that could be highly inflammable. Since the introduction of the External Wall Fire Review form, or EWS1, in December 2019, banks have refused to offer mortgages for the purchase of any properties in high-rise apartment buildings (above 18 metres) that do not have one of the forms. Then, in January 2021, the government issued a poorly conceived “advice note” that extended the crisis to 1.3 million flats in 88,000 blocks taller than 11 metres high.

Making Matters Worse

Ostensibly intended as a means of recording what assessment has been carried out for the external wall construction of residential apartment buildings, the ESW1’s most notable impact has been to trap millions of leaseholders — including many first time buyers — in financial hell. 

In a recent survey conducted by BBC Newsnight, 16% of respondents said they have either been directly affected by the crisis or know someone who has. Many have had to pay hundreds of pounds a month to cover the costs of round-the-clock fire-patrols. Home insurance costs have exploded. Many have also paid for a safety inspection, so that their building can finally qualify for an EWS1. But if their building didn’t make the grade, they have had to pay tens of thousands more to have the flammable insulation and cladding materials replaced and other fire risks remediated.

One first-time buyer was recently landed with a bill of more than £200,000 to rectify fire safety defects — almost as much as the price she paid for her flat. According to a recent article in The Times (behind paywall), around 3 million people are currently stuck in limbo as a result of the crisis. That number could be set to grow even larger, if the UK government’s Fire Safety Act (FSA) passes in its current form, warns independent cladding expert Jonathan Evans, who blew the whistle on the cladding crisis just after the Grenfell fire.

A former technical committee chairman of the Metal Cladding and Roofing Manufacturers Association and CEO of the cladding company Ash & Lacy, Evans is scheduled to address MPs and peers at an all-party parliamentary group on Thursday, where he will warn them that “this document must not come into effect”. Rather than streamlining processes, the new bill could end up making the crisis even worse, as a new code of practice for checking walls for fire risks — the so-called PAS9980 — risks lumbering even more people with homes they cannot sell and bills they cannot pay, Evans told The Times.

In the next few months the Fire Safety Act will make it a legal requirement to check the external walls of all blocks with two or more flats — even sub-divided period homes. The PAS 9980 is due to replace the government advice that triggered the mortgage crisis later this year. If most assessors choose to use the new PAS, or “publicly available specification”, which the government commissioned from the British Standards Institute (BSI), it could affect almost 12 million people in all 4.9 million flats in England, of which two thirds are private leasehold.

“There will be a huge queue. There will be people who can’t afford the assessments. There will be people who are stuck in limbo. It will jeopardise property sales,” Evans says. He adds that PAS 9980 is “terrible news” for people in smaller blocks, who pinned their hopes on the July announcement by Robert Jenrick, the housing secretary, that buildings under 18m would no longer need an EWS1 form…

Evans believes this code, which is voluntary, will be “a catastrophe for residents and property owners that could lock up the market for flats for years”. On Thursday he will warn MPs and peers in a speech at an all-party parliamentary group that “this document must not come into effect”.

Ripple Effects

The cladding crisis has already triggered a collapse in sales of a significant slice of the UK housing stock. If sold for cash, affected properties — and there are up to 1.3 million of these flats — sell for as little as one third of what the owner had paid. As flats are often the first step on the UK housing ladder, this has set off ripple effects across the whole housing market. For instance, most first-time buyers who had purchased property using the UK government’s help to buy scheme are now unable to sell their properties. If their parents served as guarantors on the mortgage, they too are now in trouble.  

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