It’s been three years since the tragedy of Grenfell, which was caused by a fire on the fourth floor of a 24-story building and resulted in the devastating deaths of 72 residents. We are now seeing thousands of City Centre residents trapped in their apartments due to similarly un-safe and flammable cladding surrounding their homes.
Not only is there a detrimental safety risk to this cladding, but the issue is also having a devastating effect on people by leaving their homes worthless. These ‘mortgage prisons’ are being created for homeowners through the fact that their apartments are deemed zero value until multi-million-pound repairs are made on the buildings.
This is having an effect on the current market for city centre apartments. The supply is soaring and demand is lowering. The effects of the COVID-19 pandemic are setting in, and people with no knowledge of the cladding crisis are already looking to sell-up in the hope for a more rural location to call home and plenty of outside space. This on its own is causing a flood of apartments to come onto the market, and it appears the demand is seeping off at the same time because of this same reason.
Coupled with this slowdown in demand from buyers, the other issue homeowners are currently facing is the problematic mortgage applications for apartments without the correct and safe cladding. This means that anyone who is looking to purchase with either a residential or buy to let mortgage is finding it incredibly difficult to get approved. This now means that the only way owners are able to sell their apartments is to cash rich investors – who usually like an incentive for using their money to make up the whole purchase price of a property in order to help sellers get out of situations like this. The homeowners only options are to accept these offers, or wait months or more likely several years while the remedial work is carried out on their building.
This remedial work is yet another stumbling block. Although work that is carried out to fix the cladding issues and allow the apartments to become valuable again is good news, it does come at a cost. The price for the works is being paid for directly by the apartment owners, through their sometimes already extortionate service charges. Some homeowners report their yearly service charge spiking to over £5,000 on some occasions.
Here at Love Your Postcode, we are fortunate to have a clientele list of investors who are actively looking to purchase property including apartments in Birmingham and the surrounding areas.
Sign the petition to take action here.
Visit the Facebook Group ‘Brum LAG’ which has been set up to assist homeowners.
Please get in touch with the group on 0800 862 0870 if you require our help.
Composed by James Snape