Research: Landlords facing bills of more than £75k per property for building safety works

Landlords are facing crippling repair bills for leasehold properties as a result of changes brought in under the Government’s Building Safety Act. 

Over one-fifth (21%) of ‘non-qualifying leaseholders’ who answered an NRLA survey on the issue are facing repair bills of more than £75,000 per property for remediation works to improve the safety of their buildings.  

A further 17% face a bill of between £50,000 and £75,000 per property.   

The Buildings Safety Act was introduced in response to the Grenfell Tower blaze, to prevent similar tragedies and included a pledge to ‘relieve leaseholders of undue financial responsibility’ for costly building works. 

But funding has been limited, and the two schemes currently available do not cover all costs associated with remediating safety defects.

They are also restricted to those with three or fewer properties (including their own home) and buildings of 11m and over in height in England.

The “three or fewer” rule includes all properties – not just those requiring works. This rule creates a class of “non-qualifying leaseholders” (NQLs) that remains with a property in perpetuity, causing problems when re-mortgaging, re-insuring and selling a property.  

Following a robust campaign by the NRLA, the UK Government reversed its original suggestion to completely exclude leaseholder landlords from plans for developers to cover the cost of cladding remediation in medium-rise blocks.  

However more support is needed for those non-qualifying landlords potentially facing financial ruin as a result of non-cladding remediation costs.

Non-qualifying status also has wider implications for these landlords’ other holdings – even those otherwise unaffected by the fall-out from the cladding and building safety review. 

Those with larger portfolios are currently excluded from the protections unless the affected property is their primary residence, despite widespread support across the political spectrum for provisions to be extended. 

The NRLA is supporting those landlords by campaigning to expand leaseholder protections on the basis that additional funding could both alleviate the financial strain on non-qualifying leaseholders, ensure the safety of those living in affected properties, and maintain the sustainability of the rental market in town and city centres across England.