And Peabody bans shared owners from subletting, unlike an increasing number of housing associations
By Harry Scoffin
BBC Radio 4’s You and Yours programme last week heard the human costs of the post-Grenfell fire safety crisis for residents at the mercy of housing associations, even in blocks deemed safe.
One shared owner told presenter Melanie Abbott that Peabody, her social landlord, had warned that it would take “years” before it could obtain the necessary sign off in order for her to sell the property.
This is despite the east London block being made of brick and without cladding, a residential building never intended to qualify for the EWS1 (External Wall System 1) review process.
Jo Gol and her 75 neighbours have valueless properties until an EWS1 form can prove the block is safe to lend on.
“Our housing association Peabody has said that the work involved is so vast that it’s likely to take, and I quote, ‘years’. I just felt sick. It feels awful. It feels like I am trapped in this property and it’s worth nothing,” said the key worker.
Although the housing association is said to be confident that the block is “safe to live in”, there is no rush to get the assessment done, with Jo and her neighbours at the back of the queue.
“We’ve been told that our building is safe to live in and, therefore, not a priority for getting this certificate,” she explained.
Presenter Melanie Abbott interjected to note the absurdity of the situation, saying “it does seem bizarre that a building with no cladding – at least that anyone can see or anybody knows of – can’t simply get mortgages in the normal way”.
Jo criticised the “very blanket way” government has rushed to regulate the flats market – seemingly without concern for unintended consequences – after the Grenfell Tower fire.
She suggested that the criteria be clarified to ensure that low-rise blocks without cladding do not need to undergo an EWS1 inspection given “we are required to provide these certificates that we cannot obtain”. She said this was the best way forward as there is “no solution in sight” from anyone else.
A spokesperson for UK Finance, formerly the Council of Mortgage Lenders, told You and Yours that while EWS1 should not be “an automatic requirement”, there are balconies on Jo’s block “so a lender would want to ensure that those balconies meet the requirements on flammability”.
In a statement, Peabody said they have “more than 2,000 tall buildings to check” and that they are starting with the highest risk ones. “It’s a complex, costly and lengthy process, looking at all the materials that have been used, and that’s why it will take some time to get to Jo’s block.”
There is a nationwide shortage of experts capable of doing the work, it added.
The double whammy: subletting restrictions for ‘trapped’ shared owners
The programme also heard that shared ownership rules are preventing Jo from renting out her flat “so she feels doubly trapped”.
Peabody’s reported refusal to waive Jo’s subletting lease restrictions contrasts with the approaches of other leading housing associations.
In February, G15 members Optivo, A2Dominion Group, Catalyst and Network Homes confirmed in statements to Leasehold Knowledge Partnership that they are permitting stuck shared owners to sublet their flats on a “case by case basis”.
L&Q and Clarion went further, explaining that they were offering 12 month rolling contracts which, for L&Q, would continue “until any remedial works are completed or their property becomes mortgageable”.
Clarion, the UK’s largest housing association, cautioned that subletting requests would “depend on the lease, income and tenancy conditions”, adding that for “some of our shared ownership properties, the GLA [Greater London Authority] needs to approve subletting arrangements”.
Hyde Housing said that while they “do understand that the situation which is felt nationally is extremely frustrating for anyone wanting to sell, re-mortgage or staircase”, they reported no such problems because all of their properties have had a “comprehensive fire safety risk assessment carried out on them”.
Southern Housing Group was the only housing association to respond who did not provide information on subletting requests from shared owners affected by jittery lenders.
LKP has learnt that Notting Hill Genesis recently wrote to its shared owners that subletting would be allowed if they have been unable to staircase to 100% lease ownership and cannot sell.
Headlease headaches for residents of another east London site, while leaseholder leading the fight cancels IVF due to stress and extra financial burden …
You and Yours also heard that the complex ownership structures at another east London site was presenting problems for leaseholders, who say they have experienced blame shifting.
In this case, the housing association, L&Q, is only the managing agent, with the original developer, Bellway Homes, the head lease owner.
Usually L&Q acquire the head lease from Bellway, but for reasons unknown, they have not done so here.
(The freeholder is the Mayor and Burgesses of the London Borough of Tower Hamlets.)
“The residents have fought really hard to get information about their building safety, their exterior walls, but documents have gone missing, even service contracts, so the responsibility for putting things right is unclear,” said the presenter.
Speaking to the leaseholder pushing for a resolution, the programme heard that all of her life savings were in the flat and that after one unsuccessful round of IVF treatment, which could have been influenced by the situation at home, her and her partner have chosen not to continue on this path due to the strain and money concerns brought on by their leasehold problems.
You and Yours was told that residents were willing to pay for the work and had even found a surveyor, who confirmed he could do the inspection.
But L&Q refused permission.
LKP understands that the block is part of the So-Stepney development, which has over 700 flats.
Bellway is L&Q’s 50-50 partner over at Barking Riverside, the largest regeneration site in London, so has an interest in not antagonising L&Q.
When asked to intervene, they simply referred leaseholders to L&Q, despite owning the head lease.
It has been claimed that L&Q has admitted to leaseholders that they have no formal contract with them, having merged in 2018 with East Thames, who tended the site. It is feared that key documentation relating to building safety was lost during the handover.
While You and Yours focused on the EWS1 form, it had hinted at wider issues, reporting that time is running out for a claim to be brought against Bellway under the Defective Premises Act.
Limitation Periods: How much time is there to bring a claim?
Almost two years since the Grenfell tragedy, the latest UK government data confirms that 226 private sector residential buildings still have ACM cladding that is unlikely to meet building regulations; and there is no data on the other fire-safety issues that are emerging.
The 1972 law was mentioned as a possible lifeline for leaseholders by new building safety minister Lord Greenhalgh in a grilling by a group of MPs last month.
Leaseholders at the site are also anxious for the responsible person to make an application for taxpayer funds.
They believe that their block qualifies for the recently announced £1bn Building Safety Fund as the potentially combustible insulation behind the facing brick is part of the external wall system.
Bellway told them the news in March, but neither L&Q nor it would take responsibility.
To ensure leaseholders do not have to pay tens of thousands of pounds individually for remediation, Bellway and L&Q need to work together to submit their paperwork to the ministry of housing by July 31.