The cladding scandal has taken a new twist after it was revealed that Homes England has told a Help to Buy tower block apartment leaseholder that he cannot sell his apartment for less than its ‘unaffected’ value of £425,000.
This means that thousands of apartment owners around the UK who bought homes in towers via Help to Buy cannot put their homes on the market at a realistic price likely to sell, doubly trapping them in their properties.
In the case highlighted, a valuation by Savills said the apartment was worth £375,000 due to the remedial work that must now be completed on its exterior cladding and insulation, which recently failed a safety test.
Homes England, which runs the Help to Buy scheme, has told The Negotiator that, although it is sympathetic to the concerns of any borrowers dealing with cladding issues, it cannot comment on individual cases.
“Borrowers can apply to redeem their Help to Buy equity loans through our mortgage administrator,” it says.
“Homes England generally uses the unaffected value for purpose of redeeming loans, but we always take into account the specific circumstances which can potentially result in a different valuation being used.
“As the lender, we cannot advise borrowers on remediating unsafe cladding, which is a matter between the borrower and their freeholder.”
A letter sent to the apartment owner by Homes England and shown to Inside Housing says the sale must meet all covenants.
These should include a requirement on the borrower that the block meets building regulations at the time of sale and that it was the leaseholder and freeholders responsibility for this.