Cladding limbo for buy-to-let landlords – Birmingham Post article 10.02.2022

Buy-to-let landlords who own properties caught up in the cladding controversy are facing a worrying time.

There is a question mark over whether the Government will include them in its latest blueprint for sorting out building safety issues.

They could yet face forking out for remediation costs even though others in a similar position look set to receive a financial lifeline.

A Department for Levelling Up, Housing and Communities spokesperson said: “It is not right that innocent leaseholders – including those who have moved out and now sub-let their properties – should pay to remove dangerous cladding for which they were not responsible.

“We will explore whether this support should extend to other leaseholders, such as buy-to-let landlords.”

That rang alarm bells for the National Residential Landlords Association.

Chief executive Ben Beadle told Inside Housing: “The Government is right that innocent leaseholders should not be expected to pay the price for dangerous cladding.

“However, it is simply unacceptable that ministers are unable to commit to treating all leaseholders, whether owner-occupiers or buy-to-let landlords, the same. Both groups have faced the same problems, and both should be treated equally.

“The government needs to rectify this problem as a matter of urgency.”

But it could be March before there is clarity.

That is the deadline set by DLUHC and ‘get tough’ Secretary of State Michael Gove.

Appointed only last September, he has been confronted by a situation in which despite nearly £5 billion of public money being allocated hundreds of dangerous high rise buildings have still not been fixed post the 2017 Grenfell fire, leaving many leaseholders unable to sell their properties.

His response has been to announce £4 billion extra, to be funded by developers, with compensation extended to lower rise blocks between 11 and 18 metres tall.

He also warned of taking all steps necessary to make the industry cooperate, including restricting access to Government funding and future procurements, the use of planning powers and the pursuit of companies through the courts. He added that, if necessary, the Government would impose a solution.

He told developers: “Our home should be a source of security and pride. For too many of the people living in properties your industry has built in recent years, their home has become a source of misery. This must change.

“It is neither fair nor decent that innocent leaseholders, many of whom have worked hard and made sacrifices to get a foot on the housing ladder, should be landed with bills they cannot afford to fix problems they did not cause.”

He went on: “Some developers have already done the right thing and funded remedial works and I commend them for those actions.

“But too many others have failed to live up to their responsibilities.”

Further confusion in the system for prospective purchasers and sellers comes with EWS1 forms – a cross-industry initiative from Building Societies Association, the Royal Institution of Chartered Surveyors and UK Finance – by which valuers and lenders can assess if a property with cladding might need remediation work which would affect its value, and indeed that it is safe for habitation.

However if a valuer decides there is no need for EWS1 inspection it remains no guarantee that fire safety remediation works will not be required in the future.

The Government has further muddied the waters stating: “The vast majority of 11-18 metre buildings are safe and others that do have combustible cladding may also be safe or can be made safe through effective use of existing or new fire safety measures, such as sprinklers and alarms.”

Clearly, the saga has a long way to run.