Residential Leaseholders and Interim Fire Safety Costs

Florence Eshalomi Excerpts

Wednesday 10th March 2021 Westminster Hall

[Florence Eshalomi (Vauxhall) (Lab/Co-op)]

I beg to move,

That this House has considered residential leaseholders and interim fire safety costs.

It is a pleasure to serve under your chairmanship, Mr Hollobone. It is also a pleasure to be back in Westminster Hall and to be able to debate such an important topic today. When I became the MP for Vauxhall in 2019, two and a half years after the horrific Grenfell Tower fire, I did not expect to find so many of my constituents still living in unsafe buildings, blighted by dangerous cladding and other fire safety defects. To date, I have received correspondence from and been contacted by more than 250 individual leaseholders living in 27 different unsafe building developments in my constituency. And that is just in Vauxhall. The sheer scale of the cladding scandal is truly shocking, and it has revealed the full extent of what can only be described as a systematic failure in building safety in this country. But because of the tireless efforts of campaigners and their supporters up and down the country, we know that safety is only one part of this story. Leaseholders who bought their homes in good faith now find themselves saddled with the financial responsibility and liability for problems that they had absolutely no part in creating.

Much has been said recently about this injustice, and I am grateful to colleagues across the House who have called for urgent action to protect innocent leaseholders. Understandably, much of the debate has focused on who should pay for the cost of the remedial works to remove and replace the cladding. However, I want to draw attention to an equally urgent but much less talked about financial aspect of this crisis. That is the eye-watering charges that are being passed on to leaseholders for compulsory interim fire safety measures while they wait for the remediation work to be completed.

Interim costs have life-changing impacts. The sheer feeling of hopelessness is shared by many leaseholders I have spoken to. One constituent wrote to me and said,

“I have worked hard. I have contributed to the communities in which I have lived. I have paid over £100,000 in taxes over the past three years. And yet I now find myself facing potential bankruptcy, homelessness and the collapse of my business through no fault of my own. My future is utterly bleak, and my life feels worthless.”

As soon as a building is assessed to be unsafe, residents are told that they must immediately introduce additional fire safety protocols or face an evacuation order from the fire brigade. The requirement for those interim measures can be met in two ways. One is by appointing a waking watch, whereby trained wardens continually patrol the building in order to be able to detect a fire. The second is the installation of specialist alarm systems. Faced with homelessness, leaseholders have little choice but to assume the costs for those measures.

Interim measures have become a frequent occurrence as the fire safety crisis has unravelled over the last three and a half years. Every week, new buildings have been discovered to be unsafe. Worryingly, a fire safety assessment is generally triggered only when the leaseholder tries to remortgage or sell, which in turn triggers the external wall survey or the now-infamous EWS1 process. It means that the true scale of the problem is still unknown, and it will only grow in the months and years ahead.

There is currently nothing in law to protect leaseholders from the financial responsibilities for such interim measures, which are typically passed on through increased service charges. The data on interim costs are patchy and incomplete. Government figures show that the average estimated cost of a waking watch in England is £17,000 per block, rising to over £20,000 in London. Per household, that translates to a bill of approximately £500 a month for each affected household. Alarm systems are not much cheaper as an alternative, with estimates ranging from £50,000 to £150,000 depending on the size of the building. Those figures are eye-watering, and they will recur month after month, year after year, until the cladding is removed and the building is deemed completely safe.

In February of this year, the Minister told Parliament that

“we are clear that waking watch regimes should only ever be used in the short term”.—[Official Report, 1 February 2021; Vol. 688, c. 690-691.]

On one development in the Kennington area of my constituency, however, they have been paying for a waking watch since July of last year, at a cost of £10,000 per flat. The remediation works are not expected to be completed before the end of next year, and the alarm system is deemed insufficient to meet the danger. The total cost of the interim measures for this one development is currently estimated to reach over £1 million. What really sticks in the throat for my constituents is not just that the interim measures are expensive and mandatory, but that their effectiveness has been called into question. One constituent told me:

“These guys add little practical value and sit around watching TV on their phones, and yet we have to pay for them under the threat of being evicted if we don’t. In a fire, they are not really going to be able to make a blind bit of difference through evacuating residents.”

We have to remember that such interim measures are a daily reminder to our constituents that the buildings they live in are unsafe. The amounts are unaffordable for most people at any stage in life, but many of those affected are young, first-time buyers whose dreams of home ownership have turned into an unaffordable nightmare, with their homes literally unsellable. Industry experts estimate that it will take between five and 15 years for all affected buildings to be remediated. The truth is that the costs are anything but interim.

Ministers have known about this problem for almost four years. They have repeatedly acknowledged that fire safety defects are not the fault of leaseholders, and yet it took the Secretary of State until December last year to announce any sort of help for interim costs. The waking watch relief fund, which offers a grant to pay for the installation of fire alarm systems, was a welcome step in the right direction, but it remains the only form of Government assistance that is available for interim costs. In their current form, the fund’s provisions are partial and insufficient. Leaseholders living in blocks below 18 metres are excluded from applying. The Government claim that this is because the risk of a life-threatening fire in lower buildings is smaller, but any building that faces an evacuation order if the interim measures are not established is, by definition, clearly not safe, regardless of whether it is 18, 15 or 12 metres.

One such block in Vauxhall, which is under 18 metres, failed its EWS1 assessment in October 2020, and its leaseholders have had to find more than £170,000 to pay for interim safety measures. It is estimated that the remediation work will cost in total £1.4 million. The developer of the building has gone out of business, and leaseholders were all excluded from any Government support schemes. I simply do not know how this situation can ever be fair.

Even if we focus our attention on just the buildings over 18 metres that can apply for the fund, the £30 million that the Government have allocated is drastically short of what is needed. The Government estimate that that will pay for a maximum of 460 buildings, but there are at least 560 eligible buildings in London alone. Lord Greenhalgh told the Housing, Communities and Local Government Committee on Monday this week:

“We recognise that the £30 million goes some way, but not all the way.”

Finally, the fund pays only for an alarm system purchased and installed after December 2020. That totally ignores the thousands of pounds that leaseholders have already spent on compulsory and expensive but ineffective waking watch systems. How can that be right or fair?

The Government, including the Minister, have repeatedly said in the House that no leaseholder should pay, so I ask the Minister whether he agrees in principle that innocent leaseholders should not be responsible for solving the problems that they did not cause. Why are we asking the same leaseholders to pay extortionate sums for interim costs?

I am grateful to the Minister for attending this debate today. I want to conclude my remarks by focusing on what can be done to fix this appalling situation. I have four questions for the Minister, which I hope he will answer. Will the Government agree to the principle that no leaseholder should have to pay for interim fire safety measures to mitigate the problems that they did not cause? Will the Government commit to including provisions within the upcoming draft Building Safety Bill to protect leaseholders from such costs, and ensure that they are picked up by the people who were responsible for causing them in the first place? Will the Government immediately extend the waking watch relief fund to match the number of buildings that we know are affected, and make sure that all leaseholders facing these costs can apply regardless of building heights?

The Minister has previously said that interim measures should be used only temporarily,

“because they are an entirely inadequate substitute for remediation.”—[Official Report, 1 February 2021; Vol. 688, c. 691.]

With that in mind, will the Minister ask the Government to mandate a timetable for the completion of the remediation work in all unsafe blocks to make sure that the interim costs do not have to be paid by leaseholders for years to come?

[Mr Philip Hollobone (in the Chair)]

The debate will last until 10.55 am. I intend to call the Opposition spokesman no later than 10.32 am and the Minister at 10.42 am. Florence Eshalomi will have two or three minutes to sum up the debate at the end. There are 16 Back Benchers seeking to contribute. I want to make sure that everyone gets in, so I am afraid that I will have to impose a time limit. If we aim for three minutes, everybody should have their say. All Members participating virtually should have a countdown clock on their screens. We will start with Stephen McPartland.

--- Later in debate ---

[Florence Eshalomi]

I am grateful to right hon. and hon. Members for their contributions; all raised excellent points. That highlights the consensus of all Members across the House.

I thank the Minister for his comments, but respectfully, his argument about prioritising the high cost of remediation work is a sideshow, a false economy and morally bankrupt. We need to look at how we can help our constituents now. These interim costs will not go away. I look forward to writing to him to highlight some of the questions I posed.

Question put and agreed to.

Resolved,

That this House has considered residential leaseholders and interim fire safety costs.