‘Grenfell tragedy changes everything’

The UK government has since commissioned a public inquiry. The Department for Communities and Local Government has asked housing providers to identify all residential buildings of six storeys or higher suspected of having materials similar to the ACM (aluminium composite material) used in the cladding at Grenfell Tower in West London.

 

It is sharing data with the Homes and Communities Agency so that it can identify which providers have the largest potential remediation exposures. The regulator is telling associations that it expects them to prioritise safety over new development, but believes most have capacity in their finances to bear costs and prioritise capital expenditure.

 

Government estimates that around 600 towers carry ACM cladding. By 3 July 2017, all 181 of the buildings tested had failed the combustibility tests.

 

London’s largest housing associations suspect that 114 of around 1,200 tower blocks they have across the capital contain ACM cladding.

 

David Montague, chief executive of L&Q and former chair of the London G15 group, told the Housing 2017 conference in Manchester that while it is a ‘big number’, it is a relatively small proportion of the total number of blocks in London. The HAs have been collecting data and working closely with local authorities and fire authorities.

 

L&Q alone has 220 medium to high-rise blocks, the vast majority of which are not clad. Of those that are, just three buildings have been confirmed as having ACM cladding. It has introduced 24-hour security and been giving assurances to residents, and is working on a ‘bespoke solution’ for all towers while consulting tenants.

 

Mr Montague said: ‘It’s utterly shocking, the thought that it could have been anybody in the sector. For me, and for all of us, Grenfell Tower really does change everything.’

 

He added: ‘There is a desperate need for new homes and we cannot step back from that, but we must be absolutely sure that the homes we build today and in the future are safe.’

 

Mr Montague said there is also an ‘urgent need’ to see the results of the review of building regulations so they can apply them to developments on site.

 

He added that the issue goes beyond associations and councils to a much wider ‘building problem’.

 

Local government minister Marcus Jones told delegates at the conference that the government needs to support the sector to regenerate housing estates in the wake of the Grenfell Tower fire.

 

He added: ‘The Grenfell Tower tragedy has reinforced the importance of making sure people have safe, secure homes to live in. We’re absolutely determined to redouble our efforts to make it easier for people to house themselves and their families.’

 

It was reported that government had told the Local Government Association that it would cover the cost of work councils have to carry out to improve the fire safety of their blocks. There have also been discussions between associations and funders.

 

One lender said: ‘We are just trying to understand from our customers how many towers they have got and whether there is cladding attached.’

 

Paul Stevens, managing director of Centrus Advisers, said the cost of remedial works could have an effect on some associations’ covenants, ‘particularly if they have interest cover including capitalised repairs spending and the cost of the works was captured within the covenant’.

 

Neil Waller, partner at Trowers and Hamlins, said valuers are not giving loan security values for tower blocks at present, so associations carrying out a refinancing may need to find alternative security, or delay or restructure their transaction.

 

Jonathan Pryor, director of assurance and business services at auditors Smith & Williamson, said there could be a debate over whether associations should recognise an impairment on affected properties. He said associations should explain the position in relation to tower blocks and the actions they plan to take in the narrative of their accounts.