Property Gold: Del Boy Trotter and PLC New Homes

Property Gold is a monthly column written by independent property consultant, Alex Goldstein. With more than 17 years’ experience, Alex helps his clients to buy and sell residential property in some of the most desirable locations in Yorkshire and beyond.

Only Fools and Horses – the ultimate British sitcom following the trials and tribulations of Del Boy and his brother Rodney on their mission to get rich. However, when it comes to PLC new homes, it would seem that the large-scale developers are the ones beating the Trotters at the sales game.

I am continually staggered by the number of people who are queuing up to buy one of these homes, in a case of Boycie one-upmanship. Yet are the buying public’s memories so short like Trigger’s, that they forget the dreadful events in 2017 at Grenfell Tower where 72 people died?

What then unfolded was the cladding scandal, which has entrapped thousands of people and is still ongoing with no clear end in sight. It has also just come to light, that successive governments concealed the extent of fire safety risks to buildings going back to 1997. So why would a buyer think it a sensible choice of home or investment, if governments are also hiding information from you?

One then overlays countless misdemeanours which have been picked up in the press about the PLC developers, ranging from the controversial sale of freeholds to equity funds, escalating ground rents, to lack of insulation and pressurised selling tactics. Only the other day did London Fire Brigade warn an inquiry that developers were ‘gaming the system’ by deliberately designing blocks to be just shy of the threshold where more intensive fire safety systems were required.

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On the ground, these developments are often edge of town schemes with negligible associated infrastructure. When was the last time you saw a new GP surgery or school being built, or upgraded roads get underway? More interestingly, these schemes are actually making central town living even more expensive. Afterall, who wishes to use their car to get into a town they already live in? They therefore help underpin more centrally located homes, making it more difficult for younger generations to move up the ladder and are eroding the very integrity of our towns.

If you wish to buy a new build home, purchase from a small to mid-sized developer who has their name above the door and who acknowledges that building regulation standards are the basic requirement and not the pinnacle.

Our new homes system is broken and in light of recent news, arguably rotten to the core. My concern is that we have had decades of going down the wrong path, that we are never going to be able to find our way back out again.

The bottom line is, if you are thinking of buying a PLC new build – Only Fools would do so, you plonker Rodney!

If you have any comments or questions for Alex, please feel free to contact him at alex@alexgoldstein.co.uk

Property Gold: Cladding scandal – the bigger picture

Property Gold is a monthly column written by independent bespoke property consultant, Alex Goldstein. With more than 17 years’ experience, Alex helps his clients to buy and sell residential property in some of the most desirable locations in Yorkshire and beyond. This month, Alex examines the effects of the flammable cladding scandal following the Grenfell Tower disaster. 

 

 

Cladding isn’t just cladding. Following the tragic events at Grenfell in 2017, it has come to light that a high proportion of ‘modern’ apartment blocks across the UK were built and fitted with inadequate and flammable cladding, balconies, cavity barriers, insulation, fire breaks, plus some concrete frame structural defects… shall I go on?

The Government stepped in in February this year to pledge a £5 billion fund to help with costs, however this only scratches the surface, as the impact and fallout from the cladding scandal goes much wider than perhaps you think.

Figures vary, but current estimates suggest around 4.6m people are affected in an unknown number of buildings dotted around the UK. These owners are now effectively trapped in their own homes – they’re unsellable, un-mortgageable and insurance is questionable.

It is a dire situation for these property owners, who are mostly Leaseholders, with many facing bankruptcy as a result of escalating costs to rectify matters in their buildings. One owner reached out to me this week to say his flat was worth nothing and it cost the development where he lived £61,000 per week to have a waking watch (a patrol at night looking for fire breaches).

If Freeholders resolve matters themselves, they will undoubtedly pass these remedial costs on to the Leaseholders via a one-off charge or an escalated service charge. Afterwards and even if a building is signed-off as being safe, owners still face an uphill battle. Afterall, if you were a buyer and given the media frenzy surrounding the scandal, would you buy an apartment in one of these buildings? The market for modern apartments has been spooked and trust broken for the long term.

The implications go further still. The Government feels the banks can absorb the risk with those defaulting on their mortgages, however are we now diluting the issue by involving the banks? If they are saddled with bad debt… well we know what happened last time.

My concern is that we will be left with ghost towns and tower blocks, a fragmented society with crumbling local economies, large parts of the property market blocked with millions of owners losing out because they unwittingly chose to buy the wrong type of home. What about those wishing to pass their property (or tied up capital) on to their children, pension funds, investors – they all lose.

Whilst the Government have put forward a fund, why are we the taxpayer liable when it’s not of our making? The PLC Developers have a history of cutting corners and there’s no smoke without fire.

If you have any comments or questions for Alex, please feel free to contact him on alex@alexgoldstein.co.uk

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