When Amie Lewis and Alex Timms found out they were expecting their first baby, they decided it was time to put their one-bedroom flat on the market.
Things moved quickly and the couple had accepted an offer on the apartment in Hackney, East London, within a week. They had also agreed a deal on a three-bedroom property nearby in Bow.
But a year later and they are still stuck in their tiny flat with three-month-old son Oscar. And their story is far from unique.
More and more sales are falling through on flats that are safe because owners face waiting up to a decade for the official certification that the buildings are safe
The couple’s sale is among tens of thousands that have been torpedoed by a red-tape nightmare that experts say ‘is the biggest building fiasco of modern times’.
People like Amie, 44, and Alex, 45, have been unable to sell or remortgage their homes due to safety rules introduced after the Grenfell Tower fire.
Their buyer’s lender insisted they had a certificate to prove their flat did not have flammable cladding, but they were told it could take ten years to get the paperwork to prove it. And the whole chain collapsed as a result.
Amie says: ‘The stress has been indescribable. We have absolutely no idea how our future looks. It’s a really small one-bed flat. It’s fine for a couple, but with a baby we’re living on top of each other.
‘With Covid we’ve been working from home, squashed into a tiny space. It’s been horrific.’
Fears around cladding safety left thousands of homeowners stuck in fire traps – facing long delays and huge bills to get repair work done.
But more and more sales are falling through on flats that are safe because owners face waiting up to a decade for the official certification.
Around 30,000 deals may already have collapsed due to the issue, Money Mail today reveals, and experts warn the number could hit six figures if the Government does not step in.
We face sky-high mortgage bills
Going nowhere: Frank and Katie Petroskey do not have the paperwork required to prove their flat is not dangerous
Frank and Katie Petroskey may be stuck in their one-bedroom flat for several years due to a huge bureaucratic backlog.
The couple, who are expecting their first baby, had agreed to sell their property in Hoxton, East London, for £500,000, and move into an £800,000, four-bedroom house in Walthamstow.
But the move has been thrown into doubt because they do not have the paperwork required to prove their flat is not dangerous.
That is despite them already having a detailed analysis showing the cladding in their building is low risk.
It means their prospective buyers cannot get a mortgage, and Frank and Katie also face crippling payments because they cannot refinance. Instead, they will roll on to their lender’s standard variable rate when their deal ends, costing an extra £500 per month.
Their housing association has said it will be a minimum of two years before they can get the ESW1 form they require.
Frank, 31, who works in operations, says: ‘It feels like it’s a tick-box exercise and we’re caught in the middle.’
Kate Henderson, chief executive of the National Housing Federation, says: ‘A really significant part of the flat market in England is currently frozen.
‘This is clearly unsustainable for the property market and it is not acceptable for people’s lives to be on hold – with so much uncertainty and anxiety – for such a long time.’
The rules mean homeowners require a form to prove their building is free of dangerous cladding. If it does pose a risk, an explanation of required repair work is needed.
It used to apply only to blocks taller than 60ft (18 metres). But in January, Government guidance was extended to buildings of all heights with any cladding, not just the type that caused the Grenfell fire in 2017. And blocks with no cladding are also caught by the rules.
It means the number of flats requiring an external wall survey (EWS1) has grown from 307,000 to around 1.5 million – 6 per cent of England’s homes.
But there are fewer than 300 chartered fire engineers who can carry out an EWS1 survey – just one for every 5,000 flats.
Leaseholders in low-risk buildings are finding themselves at the back of the queue and some are being told to wait up to ten years before they can be signed off.
Mrs Henderson says there has been a growing number of young people trying to buy their first property since lockdown, only to see their moves collapse.
Buyers trying to take advantage of the stamp duty holiday have also been knocked back.
She adds: ‘We have heard of a couple of owners of two-storey terrace houses – built of brick with no cladding – who have been asked to provide an EWS1 form. Lenders increasingly seem to be operating a blanket approach in asking for these checks.’
A quarter of leaseholders requiring the certificate have seen sales collapse because they did not have one, according to a survey by campaign group the Leasehold Knowledge Partnership (LKP).
Repair work would cost £25,000
Lucy Ireland has been left unable to sell her flat due to flammable cladding fears
A mother-to-be who has been left unable to sell her flat due to flammable cladding fears the cost of repair work could leave her bankrupt.
Lucy Ireland, 30, who runs a small jewellery business, paid £124,000 for the one-bedroom flat on the edge of Manchester city centre four years ago.
But when she and her ex-partner wanted to sell it just one year later, they were told by estate agents that they could only advertise to cash purchasers because potential buyers would not be able to get a mortgage to buy the flat until the cladding had been removed.
Yet it is estimated that the remedial work required will cost the leaseholders, including Lucy, £25,000, which they simply can’t afford.
Lucy believes the Government should cover the cost of the work because the material complied with official guidelines at the time the flats were built, more than a decade ago.
The small business owner, who lives with her new partner and is due to give birth to her first child imminently, says: ‘People view this as a very middle-class problem because we own property.
‘I can afford my mortgage, but I can’t afford these kinds of bills.’
She adds that the Government’s provision of a £1.6 billion repair fund is a ‘drop in the ocean’ compared with what is required, and leaseholders will be expected to make up the difference.
A further 3.5 per cent said deals had fallen through despite obtaining one.
There were around 134,000 flat sales in England last year, meaning roughly 30,000 deals may already have collapsed due to the issue.
Nick Morrey, of mortgage broker John Charcol, says: ‘This has already caught tens of thousands of people out and it could potentially affect hundreds of thousands.’
Nine in ten leaseholders who have received the form have been told their building requires remediation work, according to LKP.
They face paying tens of thousands of pounds each for repairs. The total bill to remove unsafe cladding is estimated to be around £15 billion.
The Government has set up a £1.6 billion repair fund, but leaseholders are expected to pick up most of the tab. Some face bills of up to £115,000 each to make their homes safe.
Almost a third of the buildings still wrapped in Grenfell-style flammable cladding have yet to undergo work to remove it, according to the Government.
Cladding chaos explained
The Grenfell Tower tragedy of 2017 laid bare the true extent of dangerous building cladding that fuelled the fire.
Since then the Government has rightly tightened up fire safety advice for flats. But the rules have also caused chaos among those trying to sell.
Homeowners in buildings of all heights are now required to fill in an EWS1 (external wall survey) form to prove their building is free of dangerous cladding. If they do pose a risk they need an explanation of the repairs needed. The rules used to only apply to blocks above 60ft (18 metres).
The new guidance means the number of flats requiring the form has grown from 307,000 to around 1.5 million with fewer than 300 chartered engineers available to carry out the survey.
Nine in ten leaseholders who have received the form have been told their building requires remediation work, according to the Leasehold Knowledge Partnership, which could mean bills of tens of thousands of pounds.
Clive Betts, chairman of the Housing, Communities and Local Government Committee, says it is ‘probably the biggest building fiasco in modern times’.
He adds: ‘The Government does not recognise the seriousness of the financial demands that are going to have to be met. It should carry out the work and then try to claim the money back.’
Meg Hillier, chairman of the Public Accounts Committee, says the Government is ‘morally responsible’ for the cost.
She adds: ‘They’ve extended the net for who is affected and that is shocking. If you are going to make a blanket decision to extend the fire safety rules, you have to sort the mortgage industry beforehand so it doesn’t gum up the system any further. People’s lives will be ruined if the Government doesn’t step in.’
The EWS1 forms were brought in – following consultation between the Royal Institution of Chartered Surveyors (Rics) and banking trade body UK Finance – to give lenders more confidence in providing mortgages on multi-storey buildings.
A UK Finance spokesman says: ‘Hundreds of blocks have already been assessed with many homebuyers being able to secure mortgages as a result.’
Gary Strong, Rics global building standards director, says: ‘The Government must urgently intervene to help identify all buildings which are unsafe, and to provide further and faster funding to ensure the situation can be remedied quickly without the costs falling to the leaseholder.’
A Government spokesman says the sales figures were ‘speculative’ and that EWS1 forms should not be necessary if buildings are lower than 60ft or without cladding.
He adds: ‘There is other evidence that can prove a building is safe, and we want lenders to accept this for valuations. We’re also looking at what else we can do to support leaseholders, including working with professional bodies to see how we can increase the number of inspections carried out.’
The EWS1 form is also used in Scotland; its government is consulting on an alternative solution.
‘Let us get on with our lives’: Money Mail writer’s year long battle to sell flat that isn’t even a fire risk
Property trap: Money Mail reporter Samantha Partington
By SAMANTHA PARTINGTON
When I put my flat on the market almost 12 months ago, I never dreamed I would be caught up in the cladding fiasco that’s brought thousands of property sales to a standstill.
Yet even with the paperwork proving our apartment block is safe, Halifax – one of the biggest banks in the country – is still refusing to grant a mortgage to our first-time buyer.
With a general election and Brexit looming, there was already enough to be worried about when I put my one-bedroom flat on the market last October.
Five months and several disappointingly low offers later, I finally accepted a £175,000 bid.
It was £10,000 less than the asking price, but I was just relieved finally to have a buyer. With the sale expected to complete in April this year, I thought the end was finally in sight. I could not have been more wrong.
Inevitably, the Covid-19 crisis caused further delays.
But in the end, it was not the pandemic that derailed the sale.
Instead, it was red tape and pedantic policy as I battled to prove an apartment block that has stood for more than 200 years poses no fire risk.
My flat, jointly-owned with my ex-husband, is in a converted cotton mill in central Manchester.
The building is exposed brickwork, so it never crossed my mind that we would need to prove there was no cladding.
It was only when our buyer began applying for mortgages we discovered we would still need to do so.
The block is more than 18 metres (60ft) high, so according to government guidelines it needs a fire assessment.
When I finally received the EWS1 (external wall survey) form from my building manager, it stated that a thin strip of cladding had been found on an adjacent building, but no work was needed.
The inspector said the risk was so low that we did not have to worry. I was optimistic once more that I could finally sell my flat.
That was July, and my mood has fallen far since then. After taking two weeks to look at the form, Halifax said the Rics chartered surveyor was not sufficiently qualified to sign off the EWS1 form.
The problem is that the wording of the form’s terms and conditions is being interpreted differently by each bank.
In my case, because cladding was found on an office building next door, the professional completing the form must have expertise in assessing fire risk in outside walls.
The form states that this person should be a member of a relevant professional body that deals with fire safety in buildings, which ‘could’ be a chartered engineer with the Institution of Fire Engineers or equivalent.
Yet rather than taking the example of a chartered engineer as a suggestion, Halifax seems to think it is a stipulation.
There are fewer than 300 qualified chartered fire engineers in the country, according to Housing Minister Christopher Pincher.
I assume that’s why Rics, which designed the form, says professionals with equal qualifications are acceptable.
And my surveyor’s credentials are more than adequate: he has worked for a Rics-registered chartered building suveyor for 18 years and has experience in assessing fire risks in walls. Even Rics agrees he is qualified.
Yet Halifax refuses to budge. The bank says I must either get a new form signed by a chartered engineer or equivalent – which I did, and they declined it – or I can get a quote for the cost of removing next door’s cladding, which is likely to run into tens of thousands of pounds.
Since that isn’t a sensible option, it is back to the drawing board. Several other lenders are prepared to accept EWS1 forms signed by appropriately qualified professionals, so my determined buyer plans to try again.
In the meantime, my flat is standing empty, and is costing me hundreds of pounds in missed rent every month.
I’ve worked in the property industry, as a mortgage broker and financial journalist, for 16 years. But this must be the most farcical red tape I’ve ever had the misfortune to come across.