My £475,000 home with Grenfell cladding is worth £50,000. So I’ll now pay off my Help To Buy loan, please
… But taxpayers would lose millions
A young mother has made an intriguing intervention into the dilemma of those whose new flats are blighted with Grenfell cladding.
And it may prove a tempting get-out for those with doubling ground rents, too.
Cecile Langevin, 32, who was due to give birth to her second child last weekend, wants to move on to a larger home.
Her £475,000 flat at New Capital Quay in Greenwich – where Galliard, which built the place four years ago and owns the freehold, blames the warranty insurer NHBC for signing off the cladding – has been valued for sale at £50,000.
All the flats at the site are blighted and unsellable.
In that case, she has decided, she will pay back the 20% Help To Buy loan right now.
Expensive London flats slashed in value by Grenfell-style cladding – News – GCR
“It is like someone has taken away our life choices, our freedom,” said Cecile Langevin, 32, after hiring a surveyor to value her property in the 11-block riverfront complex, New Capital Quay in Greenwich (pictured), built by developer Galliard Homes. “And nobody is doing anything about it,” she told newspaper The Guardian, reportedly in tears.
At 20% of the market value that means she would owe £10,000.
When Mrs Langevin bought the flat in 2014 she used savings, a mortgage and a £95,000 loan under the Help To Buy scheme.
So if she pays that off now taxpayers would lose £85,000 of its loan.
Many others bought at the New Capital Quay site with Help to Buy, which Galliard was heavily promoting at the site of 950 flats.
As yet, Mrs Langevin has had no reply from Target HCA, which administers Help To Buy, beyond saying that it is a “novel” request.
“They are being evasive, because they know if they have to do this for me they have to do it for everyone who asks,” she told the Guardian.
What applies in sites blighted by cladding would also apply to the 100,000 homes caught up in the double ground rent scandal.
The government’s ill-conceived bumper subsidies to the housebuilding sector could turn out to be utterly disastrous, with taxpayers facing multi-million payouts.
Martin Boyd, trustee of the Leasehold Knowledge Partnership, told the Guardian:
“The blight caused by Grenfell is national and the government doesn’t seem to be too bothered about that. So far, what we have heard from Greenwich and Croydon is just the tip of the iceberg.”
Regardless of how much of the government loan she has to repay, Langevin is still subject to huge negative equity because the value of the flat has plummeted.
Related posts:
Taxpayers face £85,000 loss as Homes England accepts leaseholder can pay back loan on flat blighted by Grenfell cladding
Leaseholders face £19m to £40m Grenfell cladding bills at Galliard Homes’ New Capital Quay
New Capital Quay cladding may cost £7-10m, while NHBC sends in experts – and libel warning to BBC
Ground rent scandal risks becoming full-blown crisis as loans are refused on blighted homes
Galliard Homes ‘needs to take responsibility for what it has built’
McCarthy and Stone: Ground rents are not the future of retirement housing
Daft Question Of The year Time?
If you paid for a property in part using a credit card, would the credit card provider be liable under Section 75 Consumer Credit Act if the purchase was not fit for purpose?
Section 75 of the consumer credit act limits redress to purchases up £30000
However your point may be of assistance to those stuck with time shares where invariably payment was made by credit card
Considering Leasehold today is based around a Timeshare template, then this could be an interesting angle. One nasty Property Management Co. included as part of its incorporation Do. the very words Timeshare in the same breath as Leasehold. The case laws prove what has evolved over time from 1998 onwards what can be done at source when aided by a struck off Sol, who has been given grant of audience.
Here’s some food for thought, who is authorised to carry out Regulated Activities? This would be an inroad to pull them up short?
Section 75 limits compensation to transaction upto £75000
Your point may be of relevance particularly to those stuck with time shares who paid on a credit card in order to get out of the door of the sale pitch
Sorry typo £75000 should read £30000
Thanks Stephen, So Section 75 would apply to service charges presumably? In which case a part payment of a service charge by credit card (if services have not been delivered) would be covered? That could make life very interesting?
Like your angle here on this