I own a flat in a cladded block which failed its fire safety inspection and is now unsellable. I bought it in 2017 with a £180,000 help-to-buy loan when I was single, but I now have a partner and four children.
With only two bedrooms it’s unsuitable for a family of six, but I am handcuffed to this place because those with a help-to-buy loan are not allowed to purchase a second property.
I have been allowed to sublet it, so I could afford a second mortgage to buy a house in a cheaper part of the country, but Homes England, which provided the loan, insists I redeem the loan first.
Without being able to sell, I can’t afford to do this. For the last four years, we’ve been living in a friend’s flat, but are about to be kicked out.
We can’t afford London rents on top of the payments to my mortgage lender and Homes England and, if we do buy another property, face punitive stamp duty because it’s a second home. I fear the stress is going to break my family up.
JN, London
The help-to-buy rules make sense on paper. The scheme, which provides government funds of up to 20% (or 40% in London) of a purchase price, is to assist those on limited income to get a foothold on the property ladder, not to help investors multiply a property portfolio. The rules, however, did not foresee the Grenfell Tower catastrophe.
You bought your flat two months before the fire. Since then, mortgage lenders have required apartment buildings over 18 metres high to be surveyed for flammable cladding, and some are imposing the rule on shorter blocks. Those that fail are un-mortgageable, leaving thousands of homeowners in limbo.
You are in a double bind. Your block is less than 11 metres high, so it doesn’t qualify for the government’s cladding remediation fund. And as it is low rise, it’s low priority for a remediation survey. It has been four years since it failed its safety inspection and it could be years more before you get a costed plan of works, let alone a start date.
The situation will drive you out of unaffordable London, where both you and your partner work, and you have offered on a house in Stroud. Since your partner does not have an income, she can’t apply for a mortgage in her name only, which would have got round the ban.
Homes England says it is unable to comment on individual circumstances, but that it is aware of the fire safety issues that are preventing owners from paying off their equity loans. It says: “We work with our mortgage administrator and the Department for Levelling Up, Housing and Communities to agree solutions on a case-by-case basis, based on that customer’s circumstances and needs.”
That is, apparently, more than you have ever been told, so I suggested you return to Homes England armed with this quote and state your needs, which should qualify you for the exception. You did so, and are still waiting to be told of your options three weeks on.
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