Would exterior cladding deter you from buying?

MovingForwards

When I was looking I ruled out properties with cladding because of Grenfell, seeing the trouble people were having selling their properties and the way freeholders were struggling to get reports, or just not doing them. Let alone the surveyor / lender confusion about what properties need / don't need the reports.

Now there is the added complication with lenders changing criteria and altering lowest LTV at the drop of a hat.

I do feel for people who have been trying to sell, or would be selling in the next few years.

As a buyer, why add an extra layer of stress during an already stressful time.

stevat

Hi all, thank you so much for all these helpful comments and information 

I have to say I did expect some negative sentiment around this issue, but maybe not such overwhelming reluctance to consider a purchase where cladding is present only in a relatively small part of the building.

I'll try to give some more info in case this makes the situation a bit clearer and maybe the sentiment a bit more positive. 

The building is not a tower block, it's a former 5-storey office building made of brick (and roof is slate) that was converted into  high quality modern flats around 4 years ago. All flats have glass/metal balconies with wood/metal floors, there is a single lift, there are fire/smoke alarms and vents fitted throughout and there is a second emergency stairway. In case of fire alarm the building control system takes the lift to ground floor, opens its door and disables it, opens the garage door and then disables it, closes all fire doors, does whatever is needed with the smoke vents and calls the fire service. As far as I know following the Grenfell tragedy there was a set of inspections that apparently were successful. Not sure though what sort of paperwork has been generated as a result of that. What we do know, is that one term imposed by the insurance company is to have monthly visual inspections of the cladding for any damage. It was mentioned that cladding is a contentious issue at the moment so definitely need to find out more.

The building is 'self-managed', i.e. the leaseholders have formed a company and are managing the building themselves (some of them actually live in the building, others are BTL). So far the building has been maintained to a very good standard and whatever issue has been addressed quite quickly as far as we can tell. Ground rent is £200pa and service fee around £1000pa.  No idea who the freeholder is though.

Since the whole issue with cladding begun there have been 4 sales in the building, at market rates as far as we can tell. Can't know for sure, but presumably some must have used a mortgage. So our assumption is that flats in the building are mortgage-able. Not sure if this assumption holds water though.

How do we know so much about the building? We've actually been renting here since the beginning (4 years ago) and we are finally almost in a position to buy. So are thinking of approaching the landlord to see if they plan to sell anytime soon, or wait until another flat comes up for sale in the near future. We like the area and the building, but wanted to be on the safe side regarding any issues before we make any move.

SuperHan

I would ask early in the process if there is an ESW1 form for the block. If so, then there shouldn't be any issues with mortgaging.

I have a 4th floor flat in a building with cladding on 5th and 6th floors. I cannot sell to anyone but a cash buyer and cannot remortgage. And I'm one of the lucky ones as we are not expecting huge bills to replace the cladding. I would not recommend anyone else get themselves into a similar predicament, as it is a situation we have no control over and are at the whim of the management company (and the wider industry) as to when we get an ESW1 form. 

davidmcn

stevat said:

Since the whole issue with cladding begun there have been 4 sales in the building, at market rates as far as we can tell. Can't know for sure, but presumably some must have used a mortgage. So our assumption is that flats in the building are mortgage-able. Not sure if this assumption holds water though.

You can always download their titles if you want to check. Though it would only show that it met particular lenders' criteria at that time.

stevat

davidmcn said:

You can always download their titles if you want to check. Though it would only show that it met particular lenders' criteria at that time.

Oh, I didn't know that the titles include information about the mortgage - that's very useful to know

[Deleted User]

Have any of the properties been listed and sold post Dec 2019?  Thats when the government updated the guidance to include any buildings under 18m with cladding.  Prior to this it was only for 18m or higher buildings.  

I currently have 2 buyers requiring ews1 forms and ultimately it will collapse as one of the management companies has been quoted £50k for the ews1 form to be completed

I would stay away completely until the government guidance is clearer.    Unless of course you can get it for a steal and actually get a mortgage on it.  If you dont need to move for a while then you could stay long enough for it to be mainstream mortgageable again and you might make some good money on it.   Big risk though

NameUnavailable

stevat said:

Hi all, thank you so much for all these helpful comments and information 

I have to say I did expect some negative sentiment around this issue, but maybe not such overwhelming reluctance to consider a purchase where cladding is present only in a relatively small part of the building.

I'll try to give some more info in case this makes the situation a bit clearer and maybe the sentiment a bit more positive. 

The building is not a tower block, it's a former 5-storey office building made of brick (and roof is slate) that was converted into  high quality modern flats around 4 years ago. All flats have glass/metal balconies with wood/metal floors, there is a single lift, there are fire/smoke alarms and vents fitted throughout and there is a second emergency stairway. In case of fire alarm the building control system takes the lift to ground floor, opens its door and disables it, opens the garage door and then disables it, closes all fire doors, does whatever is needed with the smoke vents and calls the fire service. As far as I know following the Grenfell tragedy there was a set of inspections that apparently were successful. Not sure though what sort of paperwork has been generated as a result of that. What we do know, is that one term imposed by the insurance company is to have monthly visual inspections of the cladding for any damage. It was mentioned that cladding is a contentious issue at the moment so definitely need to find out more.

The building is 'self-managed', i.e. the leaseholders have formed a company and are managing the building themselves (some of them actually live in the building, others are BTL). So far the building has been maintained to a very good standard and whatever issue has been addressed quite quickly as far as we can tell. Ground rent is £200pa and service fee around £1000pa.  No idea who the freeholder is though.

Since the whole issue with cladding begun there have been 4 sales in the building, at market rates as far as we can tell. Can't know for sure, but presumably some must have used a mortgage. So our assumption is that flats in the building are mortgage-able. Not sure if this assumption holds water though.

How do we know so much about the building? We've actually been renting here since the beginning (4 years ago) and we are finally almost in a position to buy. So are thinking of approaching the landlord to see if they plan to sell anytime soon, or wait until another flat comes up for sale in the near future. We like the area and the building, but wanted to be on the safe side regarding any issues before we make any move.

Requirement for ESW1 forms isn't limited to tower blocks and as I think I mentioned in my earlier post some mortgage lenders are also asking for this on flats with balconies. You would have to go through with the purchase to see for certain if it becomes an issue.

jimbog

We've learned that the building's insurers have demanded weekly visual inspections of the cladding to continue proving cover

This in itself is quite extraordinary (and costly). Would the condition of the cladding vary on a weekly basis? Someone (the owners) would ultimately end up paying for the weekly visits

stevat

jimbog said:

This in itself is quite extraordinary (and costly). Would the condition of the cladding vary on a weekly basis? Someone (the owners) would ultimately end up paying for the weekly visits

At the moment this is happening at no cost as far as I understand, as members of the management company (i.e. the owners, the building is 'self-managed' to keep costs reasonable) donate their time to perform the monthly visual inspection. That also presumably means that the insurance company is happy to accept the inspection done by a non-specialist person. Whether any of this will change in the future is anyone's guess though.

stevat

Deleted_User said:

Have any of the properties been listed and sold post Dec 2019?  Thats when the government updated the guidance to include any buildings under 18m with cladding.  Prior to this it was only for 18m or higher buildings.  

A sale was completed (?) in February 2020, not sure when it was listed/started. There are currently 3 flats for sale at market rates (if not above!), so might be worth waiting how these pan out.