Build Build Build

[Orientnil]

A question....
If Boo-Boo wishes to invest in construction and build lots of safe and affordable homes, why doesn't he start by funding the recladding all the barbecue blocks people are still having to live in?

[Ronnie Hotdogs]

Hang on. Boris has said he's going to borrow a shed load of money to build and improve infrastructure?

Where is the money coming from? There's no magic money tree. We can't simply keep on borrowing more money and saddling our kids with our debt. Shouldn't we leave it to the markets to decide what needs to be built etc etc

Next he'll be handing out free internet to everyone.....

[Chicken Dhansak]

He can start using the £350 million per week we were, supposedly, to get back by coming out of the EU, supposedly. Absolute winker.

[tuffers#1]

[Dunners]

A question....
If Boo-Boo wishes to invest in construction and build lots of safe and affordable homes, why doesn't he start by funding the recladding all the barbecue blocks people are still having to live in?

It's a good question. And here's the answer: Because it's just the tip of a huge stinking iceberg that threatens to sink the UK property market.

That’s the lt:dr version. I appreciate that you may want me to expand upon that a bit more, however…. (sorry, but there's no quick way of explaining this)

Any building built in the last twenty years or so has problems. Due to a lack of quality control, peel back the surface, and you will find faults with the insulation materials, breaches in fire compartmentalisation, sprinkler systems (if they're even installed) that meet lower grade specifications than what was intended etc etc etc. I really could go on, but I'd never end.

Due to artificially inflated land prices, in order to avoid property prices going even higher than what they are, developers have chosen to 'value engineer' and build cheap. Sure, they'll spend on the kitchens and bathrooms (because that's what sells), but where it matters the quality of materials and workmanship is rubbish. All new build is absolute junk, and I'd never advise anyone to buy it.

The banks are now alert to this and are crapping themselves that they've been lending to buyers who now risk being hit with eye-watering levels of charges to pay for investigations and remedial work. This will push tens, if not hundreds of thousands of households into bankruptcy, and the bank will be left with a worthless asset.

They're therefore increasingly insisting on an 'EWS1 form' to be certified. This form is used to present to anyone interested that a building's external wall system is safe. Nobody has an EWS1 form, because they were only issued in December 2019 and originally were only intended for buildings over 18 meters. But the banks don't care - they want them now for every building because they can no longer take the risk.

Now think about what it takes to get an EWS1 form:
1. You need to find a qualified person who is willing and able to sign this form. There's not many and, because of the cladding crisis, they're kind of busy.

2. They then need to check that they have sufficient indemnity insurance to sign the form. They don't. That's because their insurance providers have a conflict of interest, as they've also indemnified the people who signed these buildings off as compliant in the first place.

3. But, putting aside the minor issue of insurance, they are not able to rely on construction plans. So that means carrying out detailed investigative works to the building.

4. So now you need to find a company that has some capacity to take on this project. They're all kind of busy too. But, let's assume you get lucky and find one who can. Think scaffold, huge holes cut into wall and ceiling cavities at multiple locations throughout the building, surveys taking weeks and months to complete etc. The investigations alone will be enough to bankrupt many households, and that’s before any remedial work take place.

5. Now you’ve peeled back the surface, you will almost always find something that compromises the safety of the residents. You cannot ignore that because, should there be a fire, you could be held criminally liable. So you have to put in place mitigating measures, such as a ‘waking watch’. That will start eating money like its going out of fashion. I know a few buildings where the cost is about £25,000 a week!

6. Anyway, you eventually managed to find someone who has capacity to carry out any remedial work that is required. Congratulations. It will cost tens, hundreds of thousands, if not £millions, depending upon the size of the building. And when that’s all done you need to go back to points 1 and 2 above.

So, who should pay:
1. The developers? They will argue that they built using materials which met regulatory standards at the time - which they did. You may be able to pursue a latent defects claim for any genuine defects, but be prepared to spend a fortune in litigation. Plus, in many cases, these developments are constructed using Special Purpose Vehicles. Therefore, if you're looking likely to be successful in your claim, the directors will just wind the company up.

2. The landlords? They will argue similar to the developers. But they wil also point out that they have sold the flats in the buildings won leases and clearly flow down the liability to the flat owner. Which is also true. Sure, you can take them to a tribunal to determine if they have the right to flow these costs doom, but every single tribunal decision so far has concluded that they do.

3. The flat owners? They will argue that it's not fair that they should be forced to pay for what is effectively absolute systematic failure. And I agree with them. However, property and contract law does not. The cost per flat could be anywhere from £25,000 to £100,000.

4. The government? The Government have been next to useless on this issue, and are doing everything they can to ignore it. After much pressure they have announced a £1billion fund. But this only covers the cost of cladding replacement, none of the other issues. It will be totally insufficient as, so far, the total cost is estimated to be £70billion. And that's just with what we know about it so far. Nobody knows what the final cost will and, as you'll be aware, the government has a few other demands for money right now.

There are at least 500,000 flats now unsaleable due to all of this. We think that this figure will increase to 4,500,000. Putting aside where the money is going to come from, it will take years, if not decades for many of these buildings to be put right. And until they are, the banks will not lend on them. SO existing flat owners are unable to sell or remortgage and will be getting stuck on their standard variable mortgage rates.

The reason why you're not yet hearing about how bad this is, is because there's been one or two other things dominating the news recently. And the economic impact has flattened property market activity. But as things pick up, more and more people are going to realise how f*cked they are.

So, there you have it. That's why the government is keeping its head down right now. It's all absolutely f*cked.

[tuffers#1]

Doesnt help that London Building regs are no longer in the
hands of The Fire Brigade for Safety .

All to do with cutting red tape back in 2011/12

[Ronnie Hotdogs]

A question....
If Boo-Boo wishes to invest in construction and build lots of safe and affordable homes, why doesn't he start by funding the recladding all the barbecue blocks people are still having to live in?

It's a good question. And here's the answer: Because it's just the tip of a huge stinking iceberg that threatens to sink the UK property market.

That’s the lt:dr version. I appreciate that you may want me to expand upon that a bit more, however…. (sorry, but there's no quick way of explaining this)

Any building built in the last twenty years or so has problems. Due to a lack of quality control, peel back the surface, and you will find faults with the insulation materials, breaches in fire compartmentalisation, sprinkler systems (if they're even installed) that meet lower grade specifications than what was intended etc etc etc. I really could go on, but I'd never end.

Due to artificially inflated land prices, in order to avoid property prices going even higher than what they are, developers have chosen to 'value engineer' and build cheap. Sure, they'll spend on the kitchens and bathrooms (because that's what sells), but where it matters the quality of materials and workmanship is rubbish. All new build is absolute junk, and I'd never advise anyone to buy it.

The banks are now alert to this and are crapping themselves that they've been lending to buyers who now risk being hit with eye-watering levels of charges to pay for investigations and remedial work. This will push tens, if not hundreds of thousands of households into bankruptcy, and the bank will be left with a worthless asset.

They're therefore increasingly insisting on an 'EWS1 form' to be certified. This form is used to present to anyone interested that a building's external wall system is safe. Nobody has an EWS1 form, because they were only issued in December 2019 and originally were only intended for buildings over 18 meters. But the banks don't care - they want them now for every building because they can no longer take the risk.

Now think about what it takes to get an EWS1 form:
1. You need to find a qualified person who is willing and able to sign this form. There's not many and, because of the cladding crisis, they're kind of busy.

2. They then need to check that they have sufficient indemnity insurance to sign the form. They don't. That's because their insurance providers have a conflict of interest, as they've also indemnified the people who signed these buildings off as compliant in the first place.

3. But, putting aside the minor issue of insurance, they are not able to rely on construction plans. So that means carrying out detailed investigative works to the building.

4. So now you need to find a company that has some capacity to take on this project. They're all kind of busy too. But, let's assume you get lucky and find one who can. Think scaffold, huge holes cut into wall and ceiling cavities at multiple locations throughout the building, surveys taking weeks and months to complete etc. The investigations alone will be enough to bankrupt many households, and that’s before any remedial work take place.

5. Now you’ve peeled back the surface, you will almost always find something that compromises the safety of the residents. You cannot ignore that because, should there be a fire, you could be held criminally liable. So you have to put in place mitigating measures, such as a ‘waking watch’. That will start eating money like its going out of fashion. I know a few buildings where the cost is about £25,000 a week!

6. Anyway, you eventually managed to find someone who has capacity to carry out any remedial work that is required. Congratulations. It will cost tens, hundreds of thousands, if not £millions, depending upon the size of the building. And when that’s all done you need to go back to points 1 and 2 above.

So, who should pay:
1. The developers? They will argue that they built using materials which met regulatory standards at the time - which they did. You may be able to pursue a latent defects claim for any genuine defects, but be prepared to spend a fortune in litigation. Plus, in many cases, these developments are constructed using Special Purpose Vehicles. Therefore, if you're looking likely to be successful in your claim, the directors will just wind the company up.

2. The landlords? They will argue similar to the developers. But they wil also point out that they have sold the flats in the buildings won leases and clearly flow down the liability to the flat owner. Which is also true. Sure, you can take them to a tribunal to determine if they have the right to flow these costs doom, but every single tribunal decision so far has concluded that they do.

3. The flat owners? They will argue that it's not fair that they should be forced to pay for what is effectively absolute systematic failure. And I agree with them. However, property and contract law does not. The cost per flat could be anywhere from £25,000 to £100,000.

4. The government? The Government have been next to useless on this issue, and are doing everything they can to ignore it. After much pressure they have announced a £1billion fund. But this only covers the cost of cladding replacement, none of the other issues. It will be totally insufficient as, so far, the total cost is estimated to be £70billion. And that's just with what we know about it so far. Nobody knows what the final cost will and, as you'll be aware, the government has a few other demands for money right now.

There are at least 500,000 flats now unsaleable due to all of this. We think that this figure will increase to 4,500,000. Putting aside where the money is going to come from, it will take years, if not decades for many of these buildings to be put right. And until they are, the banks will not lend on them. SO existing flat owners are unable to sell or remortgage and will be getting stuck on their standard variable mortgage rates.

The reason why you're not yet hearing about how bad this is, is because there's been one or two other things dominating the news recently. And the economic impact has flattened property market activity. But as things pick up, more and more people are going to realise how f*cked they are.

So, there you have it. That's why the government is keeping its head down right now. It's all absolutely f*cked.

Dunnem, what properties make up this potential 4.5m?

[Dunners]

What, you want the addresses?

It basically just about any flat located in a block for which a mortgage lender decides they'll only lend if an EWS1 form is provided. As they are becoming increasingly risk-averse, they are now demanding this form for flats in just about any block, regardless of the height of the building or the materials used in the external wall system.

Nobody now the exact number of leasehold flat in this country, but the upper estimate is between 5.5m and 6m. If you deduct maisonettes and leasehold houses (which appear to have been common in the north west) you're left with an estimated 4.5m flats.

It effectively kills off the first time buyer market in London and other high value/demand areas of the country.

[Ronnie Hotdogs]

What, you want the addresses?

It basically just about any flat located in a block for which a mortgage lender decides they'll only lend if an EWS1 form is provided. As they are becoming increasingly risk-averse, they are now demanding this form for flats in just about any block, regardless of the height of the building or the materials used in the external wall system.

Nobody now the exact number of leasehold flat in this country, but the upper estimate is between 5.5m and 6m. If you deduct maisonettes and leasehold houses (which appear to have been common in the north west) you're left with an estimated 4.5m flats.

It effectively kills off the first time buyer market in London and other high value/demand areas of the country.

Are you only talking about flats? All flats?

[NuneatonO's]

Boris Johnson says ‘build, build, build’. Ok Boris. How about you reopen the:

- 760 Youth Centres
- 1,100 Sure Starts
- 600 Local libraries
- 60 NHS Wards
- 400 Schools
- 150 Tax offices
- 1,000 Post Offices

that have closed under the Tories. Would that be enough ‘build, build, build’?

[Dunners]

What, you want the addresses?

It basically just about any flat located in a block for which a mortgage lender decides they'll only lend if an EWS1 form is provided. As they are becoming increasingly risk-averse, they are now demanding this form for flats in just about any block, regardless of the height of the building or the materials used in the external wall system.

Nobody now the exact number of leasehold flat in this country, but the upper estimate is between 5.5m and 6m. If you deduct maisonettes and leasehold houses (which appear to have been common in the north west) you're left with an estimated 4.5m flats.

It effectively kills off the first time buyer market in London and other high value/demand areas of the country.

Are you only talking about flats? All flats?

Yes, it could be most flats. Pressure is being put on government to start working with stakeholders to find a political solution, as it's now pretty much accepted that a technical or financial isn't an option. But, so far, government just lack the head-space to deal with this.

It's all a bit of a perfect storm at the moment too. Banks are also predicting economic carnage because of Covid-19, so have been withdrawing higher LTV mortgage products at a rate faster than the GFC08.

Check out the number of available 5% mortgage products:

August 07 -986
August 08 - 134
March 20 - 391
June 20 (last week) - 16

[BoniO]

A question....
If Boo-Boo wishes to invest in construction and build lots of safe and affordable homes, why doesn't he start by funding the recladding all the barbecue blocks people are still having to live in?

It's a good question. And here's the answer: Because it's just the tip of a huge stinking iceberg that threatens to sink the UK property market.

That’s the lt:dr version. I appreciate that you may want me to expand upon that a bit more, however…. (sorry, but there's no quick way of explaining this)

Any building built in the last twenty years or so has problems. Due to a lack of quality control, peel back the surface, and you will find faults with the insulation materials, breaches in fire compartmentalisation, sprinkler systems (if they're even installed) that meet lower grade specifications than what was intended etc etc etc. I really could go on, but I'd never end.

Due to artificially inflated land prices, in order to avoid property prices going even higher than what they are, developers have chosen to 'value engineer' and build cheap. Sure, they'll spend on the kitchens and bathrooms (because that's what sells), but where it matters the quality of materials and workmanship is rubbish. All new build is absolute junk, and I'd never advise anyone to buy it.

The banks are now alert to this and are crapping themselves that they've been lending to buyers who now risk being hit with eye-watering levels of charges to pay for investigations and remedial work. This will push tens, if not hundreds of thousands of households into bankruptcy, and the bank will be left with a worthless asset.

They're therefore increasingly insisting on an 'EWS1 form' to be certified. This form is used to present to anyone interested that a building's external wall system is safe. Nobody has an EWS1 form, because they were only issued in December 2019 and originally were only intended for buildings over 18 meters. But the banks don't care - they want them now for every building because they can no longer take the risk.

Now think about what it takes to get an EWS1 form:
1. You need to find a qualified person who is willing and able to sign this form. There's not many and, because of the cladding crisis, they're kind of busy.

2. They then need to check that they have sufficient indemnity insurance to sign the form. They don't. That's because their insurance providers have a conflict of interest, as they've also indemnified the people who signed these buildings off as compliant in the first place.

3. But, putting aside the minor issue of insurance, they are not able to rely on construction plans. So that means carrying out detailed investigative works to the building.

4. So now you need to find a company that has some capacity to take on this project. They're all kind of busy too. But, let's assume you get lucky and find one who can. Think scaffold, huge holes cut into wall and ceiling cavities at multiple locations throughout the building, surveys taking weeks and months to complete etc. The investigations alone will be enough to bankrupt many households, and that’s before any remedial work take place.

5. Now you’ve peeled back the surface, you will almost always find something that compromises the safety of the residents. You cannot ignore that because, should there be a fire, you could be held criminally liable. So you have to put in place mitigating measures, such as a ‘waking watch’. That will start eating money like its going out of fashion. I know a few buildings where the cost is about £25,000 a week!

6. Anyway, you eventually managed to find someone who has capacity to carry out any remedial work that is required. Congratulations. It will cost tens, hundreds of thousands, if not £millions, depending upon the size of the building. And when that’s all done you need to go back to points 1 and 2 above.

So, who should pay:
1. The developers? They will argue that they built using materials which met regulatory standards at the time - which they did. You may be able to pursue a latent defects claim for any genuine defects, but be prepared to spend a fortune in litigation. Plus, in many cases, these developments are constructed using Special Purpose Vehicles. Therefore, if you're looking likely to be successful in your claim, the directors will just wind the company up.

2. The landlords? They will argue similar to the developers. But they wil also point out that they have sold the flats in the buildings won leases and clearly flow down the liability to the flat owner. Which is also true. Sure, you can take them to a tribunal to determine if they have the right to flow these costs doom, but every single tribunal decision so far has concluded that they do.

3. The flat owners? They will argue that it's not fair that they should be forced to pay for what is effectively absolute systematic failure. And I agree with them. However, property and contract law does not. The cost per flat could be anywhere from £25,000 to £100,000.

4. The government? The Government have been next to useless on this issue, and are doing everything they can to ignore it. After much pressure they have announced a £1billion fund. But this only covers the cost of cladding replacement, none of the other issues. It will be totally insufficient as, so far, the total cost is estimated to be £70billion. And that's just with what we know about it so far. Nobody knows what the final cost will and, as you'll be aware, the government has a few other demands for money right now.

There are at least 500,000 flats now unsaleable due to all of this. We think that this figure will increase to 4,500,000. Putting aside where the money is going to come from, it will take years, if not decades for many of these buildings to be put right. And until they are, the banks will not lend on them. SO existing flat owners are unable to sell or remortgage and will be getting stuck on their standard variable mortgage rates.

The reason why you're not yet hearing about how bad this is, is because there's been one or two other things dominating the news recently. And the economic impact has flattened property market activity. But as things pick up, more and more people are going to realise how f*cked they are.

So, there you have it. That's why the government is keeping its head down right now. It's all absolutely f*cked.

That's a really detailed piece of work - thanks for that. I have to wonder just how developers have been able to get around the building controls that should ensure minimum acceptable quality/safety standards for new-builds. Or is it that the building controls themselves have somehow been "watered down" enough for the developers to make hay.

[Dunners]

The latter. Political lobbying, privatisation of building control, market normalisation etc have all contributed.

[slacker]

Cheers for that info Dunnem. Didn’t realise the situation was sooo fecked up.

[Ronnie Hotdogs]

Agreed, thanks for putting us right, dunnem.

I'm sure most of us knew/suspected that new builds were shoddy but didn't realise the full extent of the issue.

I'm glad my property empire is built on established Victorian properties. Phew.

[Orientnil]

Well said Dunners!

Tip of the iceberg, eh? Housing market vulnerable... 4 or 5 million of us in the brown stuff. What's to be done?
I suppose I did intimate that Boris & Co should fund the repairs. It'd be with tax payer's brass, of course. Can we really expect those who do not own their homes to help shore up those who do? Well, the working poor paid their whack to keep the banks afloat, didn't they? Some may think this is a parallel situation.

As for cause and blame etc.... The basics are simple. Either the regulations were inadequate - or they were adequate and not complied with.

If the regs were no good, the government (probably Blair's) didn't discharge its duties responsibly. Then we all carry blame.

If the regs were sound, those in charge of administering and checking didn't do their jobs. The emerging privatisation of Local Authority Building Control Depts may have contributed to this; however, even then the checkers should have been checked.
Also, the designers may have sought "work arounds" to circumvent rules and save money. ("Value engineering" I think you called it.)
Manufacturers may have made fraudulent claims re performance. Christ, I hope they didn't.
Architects should have been on top of all this, of course. But these are the days of fee bidding and design and build. If they wanted to stay afloat, they'd have to make loss leading bids for work and find themselves with construction companies as their clients. Who calls the shots then?
Lastly, during occupation, these buildings had to be managed properly. eg: were fire doors propped open? Was rubbish left to accumulate in communal areas? Were fire alarms maintained? Were there periodic checks on electrical and gas installations? etc etc etc......

Solution? 'Don't think there is one. We're all Thatcher's children aren't we? Rats in a sack. Look after No 1 and thank your lucky stars if you built your house with bricks.

Up the Os.

[Dunners]

Well said Dunners!

Tip of the iceberg, eh? Housing market vulnerable... 4 or 5 million of us in the brown stuff. What's to be done?

As of now, nobody knows. Officials from MHCLG, UK Finance, RICS and other industry stakeholders are all scratching their heads.

I suppose I did intimate that Boris & Co should fund the repairs. It'd be with tax payer's brass, of course. Can we really expect those who do not own their homes to help shore up those who do? Well, the working poor paid their whack to keep the banks afloat, didn't they? Some may think this is a parallel situation.

The UK remains a bit of an outlier. Something like 70% of our household wealth is tied up in property values. Crash the housing market and you tank the economy. We've got ourselves into a right mess, and no Government has managed to find a solution.

As for cause and blame etc.... The basics are simple. Either the regulations were inadequate - or they were adequate and not complied with.

A bit of both.

If the regs were no good, the government (probably Blair's) didn't discharge its duties responsibly. Then we all carry blame.

This is all a result of a socio-economic strategy that was launched under the Thatcher government, and fully embraced in the Major and Blair years. But singling out any particular government is pointless. Collectively, it's what we've voted for.

If the regs were sound

They weren't.

...those in charge of administering and checking didn't do their jobs.

They didn't.

The emerging privatisation of Local Authority Building Control Depts may have contributed to this; however, even then the checkers should have been checked.

It did.

Also, the designers may have sought "work arounds" to circumvent rules and save money. ("Value engineering" I think you called it.)

They did.

Manufacturers may have made fraudulent claims re performance. Christ, I hope they didn't.

They didn't.

Architects should have been on top of all this, of course. But these are the days of fee bidding and design and build. If they wanted to stay afloat, they'd have to make loss leading bids for work and find themselves with construction companies as their clients. Who calls the shots then?

Correct. And it's the 'market' that's calling the shots.

Lastly, during occupation, these buildings had to be managed properly. eg: were fire doors propped open? Was rubbish left to accumulate in communal areas? Were fire alarms maintained? Were there periodic checks on electrical and gas installations? etc etc etc......

Management standards will vary from block to block and by company. But generally, most property managers have discharged their duties to an appropriate standard. However, as the saying goes, you just can't polish a turd. But that's not going to stop certain quarters from trying to use the property managers as scapegoats where possible.

Solution? 'Don't think there is one. We're all Thatcher's children aren't we? Rats in a sack. Look after No 1 and thank your lucky stars if you built your house with bricks.

The solution has to be a political one. But there are only really two options, and they're both crap:

1. Let events run their natural course. It will take years, if not decades to work itself out, and in the meantime those flat owners affected will find themselves having to pay eye-watering bills or face bankruptcy. Proponents of this will say Caveat Emptor. They signed a legally binding Deed, so why should they now expect the taxpayer to come to their rescue? In some way, maybe a dose of such brutal reality could do the nation some good in the longer term.

2. Government intervention and, probably, direct funding. I "with a heavy heart" would probably go with this option if it was down to me. But I get that it will be difficult to justify to the thousands of working poor, who are trapped in a cycle of insecure private renting, why their tax money should be used to bail out those who now find they cannot afford to pay for their contractual liabilities. Especially if we're likely to see cuts to other services. It will also mean letting certain unscrupulous landlords off the hook, who hide behind nominee directors based in off-shore tax havens.

What an absolute sh*t show.

Up the Os.

In this case, for many flat owners, it will be up the arse.

[Ronnie Hotdogs]

I guess it will come down to who owns these 4 - 5 million flats as to who foots the bill.

[Clive Evans]

More lies from BoJo to explain away why it will be No Build, No Build, No Build :- https://www.bbc.co.uk/news/uk-politics-53276461

[HeyO]

He lies shamefully.

[Thor]

Don't worry the financial reset thats coming will sort all this out. Won't it? Hence why it don't matter how much they spend cos it all gets written off.