My SO Home: No. 19

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L&Q shared ownership residents, Aubrey and Charlotte, hoped to start a family. But the building safety crisis has forced them to put their plans on hold.

“L&Q are a social housing trust. So why are they making shared owners pay 100% of the costs of building safety remediation, instead of making developers pay?

My partner, Charlotte was 29 when she bought a 30% share in an L&Q shared ownership one-bedroom flat in east London. She moved to London to take up a place on a Buyers graduate training scheme. Despite the low wage, the bottomless brunches and all those coffees and avocados, she was able to put some money aside towards buying a home. When her grandma left her mother a small inheritance, her parents decided to use this to help her get onto the housing ladder. Charlotte had been in London eight years already, and house-shared with four, five, six people at a time. Now was time to live alone properly.

But London being London, this still wasn’t enough for a 1-bed. So Charlotte did what the government told her to do, what was being sold to everyone as an option; she used shared ownership to help her buy. She moved into an L&Q shared ownership flat in 2015.

L&Q shared ownership: fire safety defects and dodgy building practices

Charlotte met me after a few years living on her own, a few weeks after Grenfell. I’d only lived in London for about eight months when Grenfell happened and it was terrible. All of London felt it, the news was shocking and bleak. It made us worried about the block she lived in. Although we didn’t know then how much of an effect Grenfell would have on our lives. Or, to be more accurate, the fire safety defects and dodgy building practices exposed by Grenfell.

Grenfell and the EWS1 form were in the background of our early relationship. We got serious, I moved in, made her life better (sometimes); I definitely made her flat tidier! And, as she progressed up the career ladder, she managed to staircase to 80%. We were delighted with this achievement. We toasted it on our wooden balcony. When we got even more serious, we discussed selling her flat. We planned to combine our incomes to buy somewhere with at least two bedrooms so we could start a family together.

Image for L&Q shared ownership feature

But around this time the block failed its EWS1 assessment. Due to missing fire cavity breaks, the wrong insulation and those wooden balconies, we suddenly discovered that she can’t sell. Not only that but the building we live in is unsafe. We had an extended period with a waking watch. Then we had to go to war with our housing association to get information, any information, about how long the remedial work would take. At the beginning, we didn’t know that we were trapped here, but it’s been four years now.

L&Q building safety remediation costs will fall on leaseholders and shared owners

Despite four years of negotiations between L&Q and the block’s developers (Vistry Partnership, formerly Galliford Try); despite four years of residents demanding information and being told that L&Q were acting with our best interests at heart; this week we discovered that, ultimately, the costs will fall onto us. 

L&Q pledged on 7 December 2021 to: ‘fully meet the costs of fire safety remediation in blocks built by its in-house construction arm, Quadrant Construction’. However, they also said: ‘when all other avenues for recovery have been exhausted, and in the absence of further funding from Government remediation costs will inevitably need to be recharged to leaseholders’.

Unfortunately for us, Quadrant didn’t build our home. Vistry did. And it wasn’t compliant with regulations even when it was built. L&Q’s negotiations with Vistry mean the company will take 45% responsibility (£3.5 million) of building safety remediation costs. But the other 55% (£4.7 million) will fall on residents, with charges of £40,000 per flat. Apparently L&Q hope these costs will be covered by a successful Building Safety Fund application. (As a taxpayer, that is infuriating in and of itself). But even if – and it’s a big if – the Building Safety Fund application is successful, we all still face bills of £2,500 per household just to sort out the wooden balconies.

Why are L&Q making leaseholders and shared owners pay remediation costs, instead of developers?

L&Q is a regulated charitable housing association, registered under the Cooperative and Community Benefit Societies Act 2014. They say that all the money they make will be reinvested into new and existing homes. L&Q are expecting to make a surplus of £330-£350 million in 2021/2022.

“L&Q’s unaudited Q2 trading results are in line with expectations. We have revised our projections on EBITDA (earnings before interest, taxes, depreciation, and amortization) for the financial year ending 31st March 2022 to be in the range of £330m to £350m (previous guidance £340m to £360m). This reflects our decision to accelerate a greater level of expenditure towards our residents’ homes as we commit to prioritising investment in safety and the quality of existing homes and services”.

Waqar Ahmed, Group Director, Finance. London & Quadrant Housing Trust Trading Update for period ending 30 September 2021.

So why are L&Q choosing to make residents pay remediation costs and not fighting for the developers to do so? Why aren’t they covering the costs themselves from their healthy surpluses?

The biological clock is ticking….

Now we can’t move, because we can’t sell. I’m 38 and my partner is 36, so we don’t have all the time in the world to have children. Charlotte cries a lot because she feels her biological clock ticking. Not to mention the worry of living in a flat that is unsafe. It’s also incredibly stressful simply to be stuck in a situation that we have zero control over. And now face a £40,000 bill at the end of it. 

We’ve been trying to hold onto the fact that we’re relatively lucky. We still have jobs. We have an 80% equity share in a property. In theory we could have a child in a one-bedroom apartment; plenty of people have managed in worse situations. But we worry about the economic climate following COVID and Brexit. We worry about losing our jobs and defaulting on the mortgage, or the rent, or those massive building safety remediation charges.

What makes it harder is that L&Q will charge shared ownership residents 100% of all remediation costs. Charges won’t be proportional with shared ownership equity shares.

The bigger picture

We also wonder about the bigger picture…

  • Should developers be let off the hook? Why are residents and taxpayers paying for mistakes made by developers?
  • In fact, why are developers being paid for, and allowed to make a profit, on the work they did wrong in the first place? 
  • Why is a social housing trust like L&Q, on course to make a surplus of over £300 million this financial year, deciding to pass the costs of remediation on to those lowest down the ladder? 
  • What is the current gridlock doing to the housing market?
  • Many people don’t yet realise that they’re also affected by the building safety scandal. How many won’t find out until their purchase or sale falls through?
  • Just exactly how many chains have fallen through so far?
  • What about older people who have retirement or pension plans tied up in a property they can’t sell?
  • How many people will become bankrupt as a result of unaffordable bills?
  • How many re-possessions could we be looking at over the next few years?

The experiences of individual leaseholders and shared owners are deeply unfair and often heart-breaking. But this is also a story of ineptitude and cover up, of building deregulation across multiple governments, of the freeholder scandal, the current and looming economic housing crisis. It’s an issue that will ultimately affect most of the UK in some way.  

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