Allowing specialist developers to build in the airspace above your block of flats could provide a solution to many owners who are currently unable to sell their property, have seen its value fall or have been burdened with huge service charge increases.
In the United Kingdom, hundreds of thousands of owners could face financial consequences as a result of new fire safety checks, introduced after the Grenfell Tower tragedy.
Following the Grenfell tragedy, in which 72 people died in a fire that spread via the building’s external cladding, the government has sought to introduce measures to ensure the safety of other tower blocks.
The regulations are in a state of flux and further changes are likely, what can be said with certainty at this time is that there has been a huge impact on those living in buildings at least 18 metres in height.
That safety checks and action to remove unsafe cladding are required is not in doubt, however there are concerns about the methodology and the financial burden placed upon homeowners.
The following issues affect many who either currently live in a building of 18m or over in height, or are in the process of buying a flat within such a building.
- Owners cannot sell their properties unless their building has been certified as safe under the new checks – an EWS1 form is required.
- There is a huge backlog of buildings that require testing – there is typically a delay of several months between an application for a check being made and the check then being undertaken. There are three million privately owned flats in the UK yet just 500 engineers who have the level of insurance required to carry out checks that include drilling into the building. Owners are left in limbo, unable to sell.
- On top of the cost of the check, any remedial work is likely to be expensive, leading either to service charge increases or a requirement for the funds to be found in other ways. Remortgaging is not an option as, until the cladding is updated, the lenders will not allow extra borrowing against the property.
- Until the cladding has been replaced, security shifts might have to be funded through service-charge increases. To provide an example, one block of flats in Manchester has walking fire watch shifts through the night – these at an estimated cost of £10,000 per month, an expense shared between residents.
- There is a central fund to help cover the cost of replacing unsafe cladding, but this only applies when the cladding is the exact type used on the Grenfell Tower (aluminium composite material (ACM)). For all other forms of cladding deemed unsafe, no extra help is available, and yet the requirement to replace is the same.
At a time when so many are facing financial problems because of the impact of Covid-19, they are also finding their expenses rising. They are seeing their service charge increasing greatly, but cannot move or sell as, until work has been undertaken, they have an asset without value.
Would-be buyers are affected too, the Guardian highlighted several such cases in a recent feature, including the plight of Danyal Aziz who saw four mortgage offers fall through. Mr Aziz estimated the mortgage applications and having to live in temporary accommodation having moved out of his rental property (expecting the sale to go through) cost in the region of £10,000.
Across the UK, and especially in major cities such as London, there are thousands of buildings where remedial work is essential and yet this work is hard to finance. Airspace development can provide a solution in some instances.
Why Airspace Development Offers A Solution
Airspace development can resolve any building’s cladding problems.
In return for purchasing the airspace rights and then building extra capacity in the space above the building, conditions will be placed upon the developer. Conditions will vary by project but will include removing all cladding as required and ensuring the safety of the building, including having all certification undertaken.
Some airspace developers also opt to rent out the new properties rather than sell them, this ensures an ongoing commitment – any future problems impact the developer every bit as much as other residents. Communication is also aided through this method, the developer and existing leaseholders remaining in easy contact.
The contrast is marked as the quick comparison below demonstrates.
A property of 18m in height and above with suspect cladding where airspace development has not been considered
- Individual properties likely to be unsellable
- Service charge likely to increase
- Any remedial work will be expensive but cannot be funded through remortgaging
- Delays likely simply to have the cladding tested for safety
- Ongoing stress and worry for owners
The same property with airspace development undertaken
- Individual properties likely to increase in value
- Service charge will decrease, this because existing issues are addressed and there are now more properties to divide the charge by
- Remedial work carried out as part of the project, with all certification as required
- No requirement to test the old cladding as this will be removed and approved materials used instead
- Mental health benefits for owners – their home is no longer a huge financial liability
- The building is safer – no flammable cladding + internal fire standards improved
Airspace development will not be a solution for all. Sadly, in smaller towns where land is readily available there is less cause for airspace development.
Specialist developers also tend to focus on the major cities, those undertaking airspace development elsewhere might be more general builders without the detailed knowledge of how to proceed on these complex projects. As with all development, when airspace development is carried out badly it can cause as many issues as it solves.
For many, though, airspace development could be a potential solution. Rather than seeing the value of their property fall and find they are unable to sell, they could see property price rise, their service charge drop and all cladding issues be resolved.
At Upspace, we are specialist airspace developers who develop long-term relationships with freeholders and leaseholders.
We undertake much of the build off site to reduce disruption. The exact figure will vary, but we are able to carry out up to 80% of the work off-site – typically prefabricated dormers, timber I-beams, chimneys, plumbing systems and more (for further details please see our FAQs).
If you would like further information or to discuss the potential suitability of your property, please get in touch.