[ryantownsend]

I don’t want to distract from the tragedy itself but, even after all this, more people will continue to suffer due to the subsequent cladding scandal.

The UK government are trying to pass the costs of remediation for other cladded buildings on to leaseholders who didn’t have any involvement in the design, build or sign-off of their buildings.

Some people are already being bankrupted through extortionate waking watches, mitigation and remediation bills and I’ve even heard that one person in my city (Leeds) has killed themselves due to the stress.

According to the select committee reviewing the Building Safety Bill, “the only people who believe leaseholders should pay are the government”.

The House of Lords has proposed an amendment to the bill stating that leaseholders won’t be made to pay (note: not forcing the tax payer to pay, just ensuring the leaseholders don’t) and the Housing Committee (namely MP Robert Jenrick) are rejecting this on the basis that the tax payer shouldn’t foot the bill.

We’re talking sums amounting to up to £100k being charged to people who paid similar amounts for their apartments in the first place! One affected block was built since Grenfell, so the entire ownership could effectively be in massive negative equity.

The government have put together a fund of £1bn for non-ACM cladding remediation, expecting that to cover ~600 buildings, but already over 2,700 buildings have applied and the estimated cost UK-wide is upwards of £15bn.

The whole thing is an utter shambles and people are stuck unable to sell their properties (stalling the first time buyer market as they can’t move up to other properties, and meaning they cannot move for work in a time when there are masses of redundancies) or even remortgage!

[suvelx]

  > The government have put together a fund of £1bn for non-ACM cladding remediation, expecting that to cover ~600 buildings, but already over 2,700 buildings have applied and the estimated cost UK-wide is upwards of £15bn.

Non-ACM over 18m tall. Shorter buildings (the majority) are up shits creek too.

There's also a 30M fund for waking-watch relief... Which at 150k per alarm, you can get 200 alarms.

  > The House of Lords has proposed an amendment to the bill stating that leaseholders won’t be made to pay (note: not forcing the tax payer to pay, just ensuring the leaseholders don’t) and the Housing Committee (namely MP Robert Jenrick) are rejecting this on the basis that the tax payer shouldn’t foot the bill.

AFAIK It was initially rejected because it was worded in such a way that would make freeholders liable for other fire-safety things such as failsafe latches. Prioritizing freeholders paying out hundreds of pounds every decade over bankrupting thousands if not millions of people.

It's a farce. The building has industry paid millions in donations to the Conservative party since Grenfell. And at every turn despite parroting "leaseholders should not pay" it has been obvious that they really meant "should pay".

Meanwhile, in a fit of hypocrisy, Jenrick has been campaigning for a (Labuor) council to fix a bridge "because they own it".

[Retric]

> Shorter buildings (the majority) are up shits creek too.

Under ~18m tall building are much easier to escape from in a fire and thus have different fire safety rules. People can normally exit the building quickly. Worst case jumping from the 3-5th story is likely to result in serious injury but is often survivable. Start talking 6+ floor things get exponentially worse with every additional floor increasing the risks.

This is of course an arbitrary line, I would have a lower limit but the tradeoffs are complicated.

[pasttense01]

"Shorter buildings (the majority) are up shits creek too."

So you want to ban single family houses made of wood?

[jonatron]

I keep seeing sums like £50k and £100k per flat for cladding. How is that possible? Isn't that multiple times what a new roof would cost on a house? Or a substantial extension.

[oarsinsync]

Generally the entire exterior walls of a tower now needs to be removed and replaced. While residents remain resident in the tower. It’s not easy to cheap to retrofit the buildings.

Or maybe it is and the building industry is run by scumbags who having created this issue, are now double dipping.

Or maybe it’s a little bit of both. I don’t know myself.

[tgv]

True, that looks like a substantial amount. The outside of an average flat is a few square meters (45m2 already seems a lot). It surely can't cost upwards of £1000/m2 to replace cladding? A (Australian) price quote on the web says £12k for a house of 400m2.

[sanp]

Leaseholders / Owners should be the on the hook for bringing their buildings up to the right safety standards. This is a risk they should bear. Who gets the upside when lease / property values go up in general? This is their responsibility.

[bennyelv]

That is a very basic analysis and it misses the point. There is a system of building regulation in the UK that makes it illegal to build a building or to carry out building work which does not comply.

The building regulations in the area we're talking about here are very simple. They don't specify how, just what. E.g. The cladding material must not be flammable (simplified).

There is a system of building inspection and certification, and you cannot buy/sell/insure a building that does not have a certificate to prove that it complies with building regulations.

The issue is that at some point some complete genius said "if you're a large enough housebuilder, you can self certify".

All of the effected properties were bought in good faith with completion certificates that stated that they complied with building regulation. The properties with flammable cladding that needs replacing do not comply with building regulations.

You can't sue the builder/developer in most cases, because this will have happened more than 10 years ago.

The system of regulation is there to protect the public from unsafe buildings, and it has failed them. Why shouldn't the government pay, after all it was their promise that has been broken.

[buckminster]

I absolutely agree. Non-owners are typically paying more in rent than a mortgage would cost, yet they can't get a mortgage because of the absurd rules brought in after the 2008 financial crisis. Even after paying for this expensive remediation, the flat owners will still be ahead of renters. Why should tax-paying renters bail them out?

[hyko]

Well if we’re going down that road, technically whoever did the conveyance and survey should be on the hook as they provided the advice that formed the basis of the purchase.

They won’t be though.

[lmm]

> The House of Lords has proposed an amendment to the bill stating that leaseholders won’t be made to pay (note: not forcing the tax payer to pay, just ensuring the leaseholders don’t) and the Housing Committee (namely MP Robert Jenrick) are rejecting this on the basis that the tax payer shouldn’t foot the bill.

How does the amendment ensure leaseholders don't have to pay without putting taxholders on the hook? You can't make money from nowhere.

[iso1210]

The person that owns the actual building and land could pay.

The company and officers who sold the cladding (especially the ones who cheated on the tests) could pay

[dijksterhuis]

In a Venn diagram, "not leaseholders" will be all other space on the diagram.

I imagine it's meant to leave all other options on the table (taxpayers, developers and/or anyone else) rather than force a specific choice (except leaseholders).

[contravariant]

The one coherent explanation I can come up with is that they want to fund it by taxing people/companies that evade taxes.

Though that doesn't sound right for the current UK government.

[itronitron]

What is a leaseholder in the UK?

[alextingle]

Technically, a leasehold is a very, very long fixed-term rental tenancy, with a single up-front payment. The tenancy is freely transferable, so there is a market for leaseholds that resembles the property market for freeholds. (A freehold is where the property is owned outright.)

In practice, leaseholds are mainly used to apportion "ownership" within buildings such as apartment blocks, where simple ownership of the land does not sufficiently capture the complexity of the situation.

Problems arise in a number of areas:

First and foremost, leaseholds resemble property ownership, and so many people naively treat them as such. But the value of a lease decreases as time goes by. When only a few years remain, the value drops very quickly. People who are unprepared for this can get a nasty shock, and feel hard done by.

Secondly, and more subtly, the leasehold creates a complex relationship between the landlord and the tenant - just like any rental agreement. The terms are set out in a contract which is specific to that particular leasehold - so they may vary greatly one from another. There are a myriad ways that they can contain unfair clauses, or unexpected terms.

One recent scam is for landlords to create leases that have a small, annual "service charge" (payable to the landlord) whose cost doubles every few years. After a while, the payments become extortionate!

In this case, the landlord is allowed to charge tenants for the cost of some kinds of works to the building. In the lease, that probably looks like a small item, but a clever landlord can specify the works in such a way that the tenants shoulder most, or all of the cost.

[iso1210]

In the UK, the land and the buildings is usually owned by some offshore company - a 'freeholder'

The right to occupy a given flat in the building is then sold for 99 or 125 years to a 'leaseholder', who also signs up to pay for the operational costs (insurance, cleaning, gardening etc) for the open area

They also agree to pay a 'ground rent', say £20-50 a month to the freeholder. That often doubles every 25 years (so about 2-3% increase per year), but sometimes doubles every 15 or even 10 years (so 7-8%)

[fennecfoxen]

The UK, for historic reasons, doesn’t believe in private property for the common man; almost all property in the form of land belongs to the government or someone with a legacy from the ruling class of nobility. Thus most homeowners don’t own the land their home is on, they just own a very long term lease from the actual landowner (not sure precisely what is customary these days, but imagine a 99-year lease) with N decades left on it. This is a leasehold.

Owning the land is called a freehold, and the owners are called freeholders instead of leaseholders.

Contrast the US where a lease of a home is typically paid monthly and contracted on a year to year basis.

[vijayr02]

I agree, here is a related story I'd submitted a few days ago: https://news.ycombinator.com/item?id=25460601

This story is about how fire watches are being organised with little to no notice and the costs charged to the flat owners.

In general the leasehold system in the UK is quite unfit for purpose and a proper feudal throwback. Agency problems galore and regulatory rent seeking at it's worst. I'm surprised there is not a more sustained political movement to get rid of it!