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As coatings crisis rages on, landlord scandal rules out £1billion relief fund

By on March 23, 2021 0

When ministers last year launched a £1billion fund to replace hazardous surfacing, Nathan Prescott believed he had been saved from financial disaster.

But his hope turned to desperation when he found out his building would not be eligible for assistance as vital repairs had already begun.

Mr Prescott is one of 98 tenants in Skyline Central 1, a luxury apartment block in Manchester, who pay up to £27,000 each to cover the costs themselves.

Hundreds of thousands of unsafe flat owners are having to pay life-changing sums to repair serious safety flaws identified following the Grenfell Tower fire (stock image)

The 44-year-old has previously been forced to move because he cannot pay the bills and says the owners are being ‘punished’ for continuing the work.

Hundreds of thousands of unsafe flat owners are having to pay life-changing sums to repair serious safety flaws identified following the fire at London’s Grenfell Tower in June 2017.

Only 202 of the estimated 11,760 unsafe buildings have been repaired, and experts estimate the work will take another ten years at the current rate.

Families trapped in unsafe flats are still waiting for funds to be released – but the vast majority are on the verge of running out completely due to lack of government support.

Ministers have set aside a total of £1.6billion to fund the remediation work, but MPs believe the overall cost will be closer to £15billion.

The current pot excludes thousands of dangerous buildings because only those above a certain height and with particular types of defects are covered. But Skyline tenants are thought to be the only group to be denied money because repairs started too soon.

Trapped by costs of up to £27,000

Owner Anna Ortega

Owner Anna Ortega

Anna Ortega says she’s stuck in her flat for the next four years because she can’t afford to pay off a loan for life-saving repairs. The 31-year-old (pictured) bought her flat at Skyline Central 1 in Manchester for £175,000 in 2015. In 2019 work began to remove siding similar to that of Grenfell Tower

Tenants are required to pay for the repairs and have been told by their landlord they can pay up to £27,000 each over five years, interest free. But when they agreed, little did they know it would later exclude them from a government fund announced in March last year, which bars buildings where work has already started. This means that Skyline tenants will not receive a penny, even if their building is covered with the same type of coating as others who will receive funds.

To make matters worse, apartment owners can only sell their property if they repay the balance of their siding repair credit in one installment. Miss Ortega wants to sell and move in with her boyfriend but says she can’t afford it anymore. The planner is paying £320 a month for the remediation work on top of his normal service charge. Together, the bills make up half of his income. “It’s completely exhausting,” she said. “When we first found out about the costs, I couldn’t wait to pay them. The funding decision is just another kick in the teeth. It does not mean anything.’

The latest government fund was announced last March, but excludes buildings where work had already begun. The Mail is calling on ministers to settle the scandal within 18 months and spare leaseholders the crippling financial burdens.

We demand that the necessary funds be made available as soon as possible, as work cannot begin in earnest until it does. In 2019, Skyline tenants were asked by their landowner, Adriatic Land, to choose between accepting responsibility for rehabilitation costs or potentially losing their homes.

Suing the developer was not an option as they had gone bankrupt and there was no financing available at the time to cover the type of cladding on their building.

Security sums that don’t make sense

Hundreds of thousands of landlords could run out of funding to fix security flaws in their apartments due to lack of government support. Ministers have set aside £1.6billion to fund repairs, but MPs estimate the total cost will be around £15billion. Funding is limited to replacing hazardous coatings on buildings over 60 feet (18 meters) high.

But hundreds of apartment buildings in England and Wales have fire safety flaws other than unsafe coatings, while there are some 77,500 buildings between 11 and 18 meters high in England alone. There are two government funds: a £600million pot for the replacement of Grenfell-style aluminum composite material (ACM) and a £1billion pot to replace non-ACM cladding.

The remediation of the ACM liner has been largely funded by the private sector or government, but the scale of the non-ACM problem is much greater. The average cost of remediation is £1.7m per building, according to the Greater London Authority, so the pot would only cover around 600 blocks. There have already been 2,820 applications, of which only 294 have been approved. It operates on a first-come, first-served basis, so 1,700 high-risk buildings cannot be prioritized. The deadline for submitting applications has been extended to June 31, but work cannot begin until funds are released.

The tenants therefore agreed to pay over a period of five years, without interest, which allowed the vital repair work to begin. When the £1billion fund was announced last year to cover their siding, residents at first thought they had been spared.

But their hopes were dashed when they realized the criteria prohibited buildings where work had already been planned or started. They applied for a judicial review last August, but it was dismissed by a High Court judge.

Aviation worker Mr Prescott has been forced to relocate because he lost his job during the pandemic and cannot pay his £309 monthly coating bill. He now lives with his girlfriend and rents out her flat, which he bought for £175,000 in 2016.

He said: “I was so excited when I bought it. It was listed as a luxury construction, with a swimming pool, gym and sauna. Now I would give up just to have something safe.

“As far as I know, we are the only ones in the country who have been punished in this way. Being denied funding because work had already begun is another perfect example of the injustice of this scandal.

Housing Secretary Robert Jenrick is facing mounting pressure to resolve the crisis after the Mail’s campaign received backing from MPs from all parties, including 16 Tory backbenchers. A spokesman for Homeground, the acting agent for Adriatic Land, said the government’s decision to deny Skyline funding was “grossly wrong and unjust”.

He added: “Tenants should not be penalized as a result of proactive work that has been done to keep them safe. “If government funding had been made available sooner, or if buildings like Skyline hadn’t been unfairly excluded from funding, none of this would have happened.”

A government spokesperson said: ‘The purpose of the building safety fund is to speed up the removal and replacement of cladding from buildings where work has not yet started.

“We are considering options for funding future remediation work and will provide an update in due course.”

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