Beyond Grenfell: The cladding crisis is still gripping the UK

It’s six years since the Grenfell disaster shocked Britain and uncovered a raft of issues built into homes across the country.

The fallout has continued ever since. Survivors and bereaved families will have to wait until next year for the final conclusions of the inquiry into the fire which killed 72 people.

Meanwhile, some people are protected from the huge costs of removing flammable cladding while others still face enormous bills to make their homes safe.

It was only in September last year that the residents of Brocklehurst Court in Macclesfield, Cheshire, found that they had been caught up in the cladding crisis.

When Jones Associates, the managing agent of the property, went to renew its insurance on the building, they saw premiums shoot up from £2,768 to £24,450 a year – a whopping 783% increase.

That surge is due to the expanded polystyrene (EPS) cladding system on Brocklehurst Court, which was put on the building in 2013 using a government grant. Residents insist the fire service has told them the cladding system is safe.

The residents of the 21 flats face huge bills to remove the cladding system with leaseholders facing bills of £20,000 each as part of a four-year remediation plan. That’s double the cap leaseholders outside London will have to pay in buildings over 11 metres in height following government intervention.

The spiralling finances have seen service costs rise from £81 a month to £284, adding to the squeeze of the cost of living crisis.

Pensioners Howard and Maria Rushton moved to Brocklehurst Court five years ago, looking to downsize and be closer to their four grandchildren. The couple, who are 86 and 84 years of age respectively, say the worry over finances has affected their health.

“Very few of the people were here when the decision was made to put this cladding on. I feel gutted,” says Howard. “In four years’ time I’ll be 90 and I’ll be lucky if I’m still here. Fifty-nine years we’ve been together and we’ve never had to face something like this.”

Maria adds: “We can’t afford it, we haven’t got the money. What’s going to happen to us then?

“Howard had a mini-stroke last year, I had one in January. It’s just all the stress and the worry and sickness all the time. It’s not fair, you’ve worked all your life, you’ve saved hard to get what you want.

“At the moment all I can think about is how I can’t spend anything because I don’t know how much we are going to need. It’s a black cloud over your head all the time.”

Warehouseman Mark Lomas, 63, and retired machinist Kathleen Lomas, 71, also fear what the financial implications could mean for their future.

Residents are concerned that the issues mean their properties are unsellable and claim two sales have already fallen through. Mark tells The Big Issue: “If you inherit it, what good is it if you can’t sell it?”

Kathleen agrees: “I’m worried about whether this is going to end up being our children’s problem. Our children have got mortgages and families and now they’ll be stuck with this.

“Mark’s not going to be able to retire in two and a half years now either.”

The issue of insurance in multi-occupancy residential buildings has been brewing for some time. Brocklehurst Court’s insurer AXA told The Big Issue that the cladding system on the building is still combustible even if people have been given the green light to live there.

“We sympathise with the situation these residents are experiencing, however it highlights a challenging issue,” says David Ovenden, chief underwriting officer at AXA Commercial. “Construction methods that are described as providing ‘life safety’ can still be highly combustible. They can allow enough time for the residents to escape but still burn ferociously and result in them losing their homes and all their possessions.

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“Construction is a key component of the pricing process for residential property. Combustible buildings, and particularly those with extensive polystyrene cladding, represent some of the most hazardous construction types.

“AXA UK believes it’s critical that leaseholders are completely aware of the implications of not removing flammable materials from the building’s structure. ‘Life safety’ is vital but the buildings themselves need to be resilient too. We have not left any of our existing customers without insurance cover and have gone further by keeping premiums as low as possible, despite higher risk.”

In a letter to Macclesfield MP David Rutley regarding Brocklehurst Court in March, building safety minister Lee Rowley said he “recognised there is a challenge with insurance on some properties at the current time”.

Rowley also said that, generally speaking, the government “does not believe costly building safety remediation should be necessary for buildings under 11 metres in height”

The Financial Conduct Authority (FCA) noted that the supply of insurance for mid-rise and high-rise buildings had contracted since the Grenfell disaster in its 2022 investigation.

Before the fire there were 20 insurers operating in the market but 11 have either reduced activity in the market or withdrawn completely. Only three insurers that remained reported no change in business.

That means there is less competition in the sector and premium rates have shot up in recent years – the FCA found prices increased by 125% on average from 2016 to 2021 due to flammable cladding or other fire risks.

A spokesperson for the Department for Levelling Up and Communities said: “The findings of the recent FCA report laid bare the shocking practice of some brokers fleecing innocent leaseholders. Whilst the FCA proposed measures were a welcome first step, they didn’t go far enough to protect leaseholders.

“We will be taking our own action to cease property managing agents, freeholders and landlords from receiving commission on building insurance and replacing it with a fair and transparent fee in the service charge.”

Work is ongoing to tackle the problem. The financial regulator’s consultation on amending rules on fair value and greater transparency for leaseholders ended last week.

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The Association of British Insurers has been working with the government on a reinsurance scheme to enable insurers to underwrite the entirety of fire-safety risks and eliminate the need for huge excesses. The scheme will be launched this summer, the government told The Big Issue.

“We recognise the ongoing financial and emotional strain that leaseholders affected by cladding and other fire safety issues are facing. Our priority is to establish a risk-sharing scheme that aims to reduce insurance costs for the buildings most significantly affected and will provide further details as soon as possible,” an ABI spokesperson tells The Big Issue.

However, both AXA and the ABI agree that the issue will persist until buildings caught up in the scandal are fixed. That means ultimately buildings need to be remediated to a standard that “protects both lives and the property”, according to ABI.

AXA’s Ovenden says: “We maintain that remediation is the only long-term solution to address the risk that has led to high premiums.”

But, like most people caught up in the cladding crisis, life in limbo is the current reality.

First-time buyer Neil Stewart, 40, paid £158,000 for a two-bedroom flat at Brocklehurst Court two years ago. The financial adviser said he can absorb the rising costs but the lack of clarity is weighing on him.

“It just feels like it’s going into a bit of a black hole because if you’re paying insurance you’re not really getting anything from it. It feels like we’re paying £200 extra for nothing,” says Stewart.

“You just feel trapped and maybe a bit helpless as well because there’s only so much you can do. It’s just making me angry because you have it hanging over your head all the time, not knowing when or how it’s going to be sorted.”

It’s a feeling that anyone who has been touched by what happened at Grenfell in the last six years will be all too familiar with.

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