Leaseholder Support Scheme Wales

5th July 2022

Leaseholders in Wales will be pleased to see further support announced by the Welsh Government for leaseholders facing rising costs in high-rise apartments due to cladding. The Welsh Government’s Leaseholder Support Scheme has been implemented for Leaseholders who live in these apartment types in Wales. The aim of this scheme is to offer advice and solutions to residents who are currently dealing with cladding issues in their developments, including restrictions on selling. We will cover what this support is and how leaseholders can access it.

In the wake of the Grenfell tower disaster, many high-rise properties in the UK were found to have dangerous combustible cladding built on their exterior walls. As housing is a devolved issue, it was the responsibility of the Welsh government to help support leaseholders in Wales. While this has been a problem for those currently living in unsafe properties, leaseholders have also faced restrictions when looking to sell their apartments. With leaseholders having to bear the costs of making their building fire-safe before it can be mortgageable, unfortunately, this has resulted in many leaseholders getting into financial difficulties.

The Leaseholder Support Scheme will remedy this by promising to buy out a limited number of properties from leaseholders affected by the cladding issues. It will aim to purchase the eligible properties at a “fair market value” and will be at no extra cost to the leaseholder. The purchased properties will then be made fire-safe by the government. Welsh Climate Change minister Julie James speaks of the scheme;

Addressing fire safety defects in medium and high-rise buildings must go beyond cladding to make these buildings as safe as they can be, this has been our premise from the outset and, although it makes identifying, addressing and resolving issues significantly more complex, it is the right approach. There are no quick or easy fixes, but we cannot compromise on achieving the right, sustainable solutions.”

 

Leaseholder support scheme eligibility

. There are some basic criteria measures that must be achieved for leaseholders to apply for this scheme, these are;

• Apartments must be in a building over 11m high or have a recognised fire risk
• The fire safety issues have contributed to higher than normal service charges
• Has documented fire safety issues either in the form of;
  • A B2/A3 on the properties EWS1 form
  • Documented fire safety failings under the Fire Safety Order or the Housing Act
  • Evidence of lack of eligibility for re-mortgage due to fire safety issues

You will also need to provide your annual income and other financial information to determine whether you meet the financial eligibility, although the exact criteria for this are at the discretion of schemes’ independent financial advisors and will focus the most on those in tangible financial hardships.

Our Managing Director Douglas Haig had this to say about the scheme:

Whilst this scheme is a positive for those in truly extreme hardship, I suspect there will be highly limited numbers able to take advantage of this scheme.  What we really need in Wales is for the Welsh Government to clarify what aspects of the UK Building Safety Act they are adopting and when, getting a deal with developers to pay for their defects as they have in England (or better) and very importantly the progress they have made with the Building Safety Passport and their future plans.  With the latter, leaseholders will be able to better plan their future and inform current mortgage lenders who will likely be more supportive as a result.

Therefore, whilst this is an appropriate step for those in true hardship, accelerating these other areas might mean no leaseholder needs to be in hardship at all.”

If you are a leaseholder looking to benefit from the Leasehold Support Scheme, please contact our blocks team here or visit the government website for further information.

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