After cladding leaseholders issue damning report into housing associations’ response, housing minister Lord Greenhalgh lashes out at ‘sanctity of social housing providers that have built rubbish’

By Harry Scoffin

Last month, campaigners and Lord Greenhalgh turned the heat on housing associations with a highly critical report by End Our Cladding Scandal and a rare flash of anger from the minister ad-libbing in a parliamentary debate.

In Dereliction of Duty, published on February 20, End Our Cladding Scandal shed light on the plight of homeowners who really cannot afford the building safety crisis: the shared owner and housing association leaseholder, while over in the House of Lords later that week the minister tasked with getting the Building Safety Bill onto the statute books veered off script to argue that “polluting” social landlords must pay up as part of government’s new cost recovery mission.

End Our Cladding Scandal’s Dereliction of Duty, a 48-page document detailing the experience of 352 shared owners and leaseholders living under 35 of England’s not-for-profit housing associations who responded to the campaign group’s call for evidence in November, found that nine in ten respondents rated their housing association’s customer service in relation to the building safety crisis negatively, with 55% picking the worst possible rating, ‘very poor’, while one in five respondents confirmed they had been put on medicine or took sick leave due to their deteriorating mental health from the cladding bills and uncertainty of living in a death-trap flat.

One in five cladding scandal victims on medication or off work due to stress

New research into the flat owners who can least afford the cladding scandal’s life-changing costs highlights just how much is at stake as the Building Safety Bill goes to the House of Lords tomorrow. The End Our Cladding Scandal campaign surveyed 352 leaseholders of 35 not-for-profit housing associations.

The End Our Cladding Scandal report received coverage in the Sunday Times and Inside Housing and was also praised by Lord Young of Cookham, formerly Sir George Young, the Conservative politician responsible for collective enfranchisement, a right-to-buy scheme for flat leaseholders which he legislated for in the early 1990s, brandished a hard copy of the report in parliament.

Meanwhile, minister for building safety and leasehold Lord Greenhalgh found himself departing from his notes in a Lords debate on Building Safety Bill amendments to make a spirited intervention on the “noble” purpose of local authorities and housing associations and whether this should protect them from the costs of remediating their stock blighted by cladding and other related fire safety defects.

“I just do not agree about the sanctity of social housing providers that have built rubbish … The levy should apply to people who have polluted, irrespective of whether they are a council, a social housing provider or a private developer, because they oversaw and built rubbish,” he thundered on February 24.

“If you are a polluter—it does not matter whether you are a social housing or a private housing polluter—you have to step up and take responsibility. I was a council leader for six years. If a council oversees its own land and builds rubbish it should do something about it, as it has broader shoulders than these leaseholders and shared owners, and the bailout should not just come from the taxpayer. That happens to be my opinion; it is not in the speaking notes. We have to be consistent about this.”

The foregrounding of registered social landlords and their financial and moral responsibilities in the cladding and building safety crisis comes as pressures mounts on housing associations to justify their existence.

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wajo Tweneboa adored his father. They were very similar: they both enjoyed a laugh, had an interest in current affairs and made sacrifices to care for others. Then, in January 2020, Tweneboa watched his father, who suddenly became terminally ill with cancer, die.

Disrepair, tenant engagement and remote management by housing associations have become hot button issues after video clips of properties riddled with mould, damp and cockroaches gained prominence online because of the efforts of student Kwajo Tweneboa, 23, who has become a social media sensation and whose social housing activism has won him mentorship and a £10,000 investment from Steven Bartlett of Dragons’ Den.

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He added that the money “will allow me now to actually reach people outside of London”, and “go and do what it is that I really want to do, which is help people across the country and hopefully get change from the government level down”.

End Our Cladding Scandal’s Dereliction of Duty report can be read in full here.

In Dereliction of Duty, End Our Cladding Scandal is damning of housing associations’ behaviour in the cladding and building safety crisis, and situates the piece of work against the backdrop of recent journalistic exposés of their practices as social landlords:

“It is argued by the sector that HAs have a ‘social purpose’, but for many of their leaseholders caught up is the building safety crisis, such a claim is impossible to reconcile with their lived experience.

“HAs repeatedly highlight the fact that they are charities and that their primary objective is to house the most vulnerable people in society. However, recent media reports, including Daniel Hewitt’s investigation for ITV into the appalling state of Britain’s social housing stock, highlight the fact that HAs are often failing to deliver on that objective. This report shows that they are also badly failing their leaseholders caught up in the building safety crisis.”

The report found that only one housing association, Clarion, had offered shared ownership respondents to pay remedial works in line with their equity stake so that, for example, a shared owner with a 25 per cent share of the lease would only contribute 25 per cent towards the flat’s portion of the block or development’s remedial works.

“This is a notable exception to the general rule of HAs recharging 100% of costs. We do not know whether Clarion has made a group-wide policy decision about this as we could not find publicly available information. While we do not think that leaseholders or shared owners should pay any building safety remediation costs at all, Clarion’s decision is notable in that it at least recognises the disproportionate way in which shared ownership leaseholders are impacted by this crisis,” said the report.

In 2020, Leasehold Knowledge Partnership reported the case of City Wharf Hoxton, where shared owners with a 25 per cent stake were being clobbered with a 100 per cent bill for cladding removal by their housing association A2 Dominion.

A2 Dominion to dump 100% cladding costs on to 25% shared owners at City Wharf Hoxton

Cost disproportionality in shared ownership has also been raised by MPs, including leader of Tory cladding ‘rebels’ Stephen McPartland.

The government has proposed a new model of shared ownership where shared owners can increase their equity stake by 1 per cent increments and would, for the first ten years of a new build block’s occupation, be protected against any major works costs under a ‘Initial Repair Period’.

It is not yet clear as to whether shared owners would be liable for 100 per cent of costs associated with remediating build defects after the decade-long IRP expires.

Housing associations furious at government’s 10-year repair-free offer to new shared owners

Another key theme of the document is the failure of housing associations to communicate with their shared owners and leaseholders and in a timely manner.

Many respondents told End Our Cladding Scandal that they had received information about their homes, service charges and fire safety issues second hand through private leaseholders in their block or development.

The report said that in cases where the freehold was not owned by the housing association, “HAs were sometimes accused of not taking an interest [in the residents], or of ‘blocking communication’ with the freeholder”.

One L&Q leaseholder said: “our HA is not the freeholder so is washing their hands of what is happening to us”.

The End Our Cladding Scandal report also highlights regulations restricting or banning sub-letting in shared ownership properties where the flat owner has not staircased to 100 per cent lease ownership, claiming that where housing associations are not offering shared owners on affected sites the “temporary relief” of renting their cladded property out, the landlords were acting “at odds” with human rights law:

“Subletting alone is not a solution to the building safety crisis, but HAs can and should offer subletting as a temporary relief to enable those who request it to move, for whatever reason. Any policy preventing leaseholders from choosing where they reside is at odds with their right to adequate housing under human rights law. The right to adequate housing contains freedoms, including the right to choose one’s residence, to determine where to live and the right to freedom of movement. It is absolutely staggering that any housing association should wilfully interfere with such basic human rights. It is equally shocking that public authorities should set funding criteria that so glaringly fail to uphold these rights.”

The report also accounted for shared owners who have been granted permission to sublet.

Many of those who have a subletting option said their housing associations had effectively defeated the purpose of the authorisation in the first place by burdening them with bureaucracy or arcane rules that make it not practical or economic to rent out the property.

A Catalyst shared owner submitted to End Our Cladding Scandal that “the rules for subletting are so onerous and convoluted (no profit at all allowed, tenant must be eligible for affordable housing etc) it is functionally impossible to do (…). As I have had to move city for work I have therefore been forced to sublet illegally with all the added stress and anxiety that brings too,” while a respondent living under L&Q added “subletting is complicated and it feels like a battle”.

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The scandal of housing associations selling short leases to their flat purchasers is addressed, too, with EOCS concluding that they “have not seen any evidence that HAs are looking into this issue or offering any solution to help the leaseholders involved”, compounding the misery of housing association shared owners and leaseholders trapped in the cladding crisis facing gigantic bills and who “through no fault of their own, may potentially have to wait several years for their building to be fixed”.

In December 2020, the Telegraph reported that one housing association cladding victim in Stratford, east London, Fabienne Jacquet, a painter and charity worker, is saddled with a short 99-year lease while the private buyers of leasehold flats on the same development were able to buy leases of nearly a millennium, 999 years, from the developer.

L&Q, who she bought the shared ownership property from in 2007, told the Telegraph that it was necessary to sell Ms Jacquet a 99-year lease to ensure “affordability”.

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The requirement for an EWS1 form has meant shared ownership buyers cannot staircase as they cannot remortgage. “The system has broken down. There is no possibility of owning the full property. The entire way that the scheme was sold doesn’t function anymore,” Ms Jacquet said.

The affordable housing provider also sneaked into the contract a 25-year doubling ground rent. Although not classed as onerous by lenders, it is a financial liability and may turn off future buyers in a market where all new-build flats will have ground rents of a peppercorn, or zero financial value.

After LKP’s urging and an exposé of the practice by a BBC Panorama programme, The Home I Can’t Afford, which saw National Housing Federation chief executive Kate Henderson grimace and smirk when questioned about why housing associations, charitable organisations with a supposedly ethical purpose, were often selling leases of a much shorter length to low income and vulnerable buyers than property developers of standard leasehold flats in the private sector, London mayor Sadiq Khan cracked down on short leases, making funding of housing associations for the building of new shared ownership homes contingent on them being sold with 999-year leases.

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The policy has since been adopted by central government for both future shared ownership and leasehold homes and is expected to be enshrined in law as part of the upcoming second leasehold reform bill, which will also feature a ban on leasehold houses.