Minister hears how cladding ‘interim measures’ are ruining a generation of homebuyers

One MP after another attempted to warn government this morning of the disastrous and unsupportable fire safety costs falling on leaseholders up and down the country.

Bankruptcies and homelessness will inevitably follow, MPs said citing numerous named sites as examples.

The debate on interim costs in the cladding disaster was called by Florence Eshalomi, Labour MP for Vauxhall. It can be viewed here: https://parliamentlive.tv/Event/Index/cc3ee26b-ec8a-4ba1-9ca9-431f9a21501d

After the mauling of housing minister Lord Greenhalgh by the Communities Select Committee on Monday, this time it was turn of housing minister Chris Pincher, repeating measures already long announced by government – and other bodies, such as RICS – and hoping this would somehow be sufficient.

At one point, Mr Pincher reaffirmed to Hilary Benn (above), Labour MP for Leeds Central, what he had said in a written PMQ earlier in the week: that leaseholders did not have to have funding in place for non-cladding issues to be eligible for government grant funding.

(Bob Blackman, Conservative MP for Harrow East, made the same point in the debate.)

This is in spite of property managers such as ARMA (Association of Residential Managing Agents) and IRPM (Institute for Residential Property Managers) telling government repeatedly that “you cannot remediate half a building”.

Bankruptcies for leaseholders and billions entrusted to freeholders and their managers, APPG told

All the work needs to be done, which means the money is needed up front.

“The question to the minister is simple: he knows leaseholders cannot afford to fix this problem, so what are his plans to do so?” Hilary Benn asked.

This question was not answered.

Yet it is pressing at the Metis building in Sheffield, said Paul Blomfield, Labour MP for Sheffield Central, which has already paid out £120,000 in waking watch costs, needs another £50,000 to cover ACM cladding that exceed the government’s cladding grant funding limite and … £6.2 million for the non-cladding related build defects.ere

Justin Madders, Labour MP for Ellesmere Port and Neston, who reminded the debate that he is also a patron of LKP, was not impressed by the contribution of investors in residential freeholders to remedy the building they own.

“We have moved from a strong expectation that freeholders would put matters right, to the shameful positon that we are in now. Frankly, it is a bit of as muddle, but it is looking more and more likely that freeholders will get their asset, that they invested in, brought up to scratch at no risk or cost to themselves.”

He reminded MPs that Lord Greenhalgh had told the Select Committee two days ago:

“We are not asking any of the building owners to make any contribution to the remediation costs.”

Mr Pincher echoed this, and went out of his way to praise freehold owners for their contribution.

“The private sector has stepped up to the plate and has paid for remediation at 50% of the cladding sites.”

He said this had come from “building owners, warranty providers and developers”.

LKP repeats again: No investor in ground rents has made any contribution whatsoever to cladding remediation (in fact, several ran off to court earlier in this scandal to ensure the costs were dumped on leaseholders not them).

Ms Eshalomi called on the government to extend the “waking watch fund” to all buildings impacted by the cladding disaster and ensure that the Building Safety Bill protects them from these costs in future.

Over eight months at a block under 18 metres in Kennington, south London, Ms Eshalomi said leaseholders had paid £10,000 for waking watch measures, and it was likely that these costs would exceed £1 million.

These costs were “eye-watering”, she said. and questioned their effectiveness, with leaseholders reporting that the waking watch staff spend their time watching TV.

Stephen McPartland, the Conservative MP for Stevenage, told MPs:

“People are going bankrupt while we are having this debate. The government is not listening to the howls of pain cominng from leaseholders up and down the country.

“Government is making things worse by not working with leaseholder groups.”

He said the insurance premium tax at some sites is now higher the premiums themselves a couple of years ago.

Dame Margaret Hodge, Labour MP for Barking, was critical of the commercial interests involved:  

“Responsibilities are diffuse; ownership is often shadey and stakeholders shirk their obligations. I have had freeholders refusing point blank from admitting that they have a moral responsibility to help.

“Developers are refusing to turn up to meetings and insurers are profiteering.”

She gave the example of the The Ropeworks in Barking where insurance has risen from £70,000 to £650,000 in two years.

“Leaseholders in Barking are not wealthy and owning a leasehold home has become a living nightmare.”

Sir Bob Neill, Conservative MP for Bromley and Chislehurst, said:

“Many of these leaseholders have done the right thing: they bought their own homes and have done what our party suggested they do.”

He said that 59% of cladding homes had an income of around £50,000, 33% had incomes of around £35,000 [source unknown].

“Yet Northpoint residents have paid out £500,000 in waking watch costs.”

John McDonnell, Labour MP for Hayes and Harlington, rounded on Ballymore which “has behaved totally irresponsibly and failed to communicate effectively” and is now dumping all the non-cladding defects they created on to their former customers.

Resentment of Ballymore, particularly at Hayes Heights, is widely encountered on social media.

“We have completely lost confidence in some of these developers, even if we had any confidence in them at the beginning,” said Mr McDonald.

Ian Byrne, Labour MP for Liverpool, West Derby, said that “waking watch is one of the fastest growing service industries in England, but with no regulation, no cap on cost and seeing an increase in leaseholders’ bankruptcy”.

Mr Pincher did concede that “too much waking watch has been in place for far too long”.

But added that the government would follow the fire chief council’s advice and that waking watch was a short term strategy.

He praised the RICS announcement on Monday to take a million leaseholders out of scope of the EWS1 process.