The Ongoing Impact of the Cladding Crisis on Property Owners
This article explores how the ongoing cladding crisis affects property owners, ranging from legal reforms to funding challenges, costs and property values.
14/05/2025By Pauzible Team · Editorial Team
The Grenfell Tower fire on 14 June 2017 was one of the deadliest residential fires in recent UK history. This devastating fire claimed 72 lives and left many more injured and displaced. The fire spread rapidly due to the building's exterior cladding, which was made of Aluminium Composite Material (ACM). Investigations revealed that this material allowed the fire to engulf the building within minutes.
Before the disaster, ACM cladding was widely used in high-rise residential buildings because it was lightweight, cost-effective and provided insulation. The Grenfell tragedy exposed serious failures in building regulations, construction practices and fire safety oversight. As a result, the government launched inquiries and legislative changes aimed at identifying and removing unsafe cladding from buildings.
There are still thousands of properties today that have been found to have similar fire-prone materials, leading to what is now known as the “cladding crisis”. Many property owners have been left with unsafe homes and are struggling to secure funding for remediation work while also facing financial hardship due to increased insurance costs and difficulty selling their properties. Despite government intervention and financial aid schemes, progress has been slow, leaving many owners in limbo. Understanding the ongoing impact of the cladding crisis is crucial for property owners and potential buyers alike as they navigate the legal, financial and safety challenges it presents.
Government Support and Funding
The government has created funds to help building owners remove dangerous cladding. The Building Safety Fund provides money for high-rise buildings with unsafe materials. A separate fund is available for mid-rise buildings. Despite these efforts, many property owners still face financial difficulties. The application process for funding can be complex and some buildings do not qualify. This leaves owners responsible for significant costs. The government has also introduced loan schemes to assist with expenses, but many people feel that these types of solution are unfair.
To speed up remediation, the government has established the Cladding Remediation Fund, which aims to cover the costs of removing dangerous materials from affected buildings. The government has also introduced the Cladding Safety Scheme (CSS), which provides financial aid to leaseholders of flats in medium- and high-rise buildings. Additionally, the Building Safety Levy has been imposed on developers to fund remediation work for affected buildings.
Legal and Regulatory Changes
In response to the cladding crisis, the government has also introduced several laws to strengthen building safety and protect leaseholders. The Building Safety Act 2022 is one of the most significant reforms. It establishes new responsibilities for building owners, developers and managers to ensure properties meet strict safety standards. One key provision is the creation of the Building Safety Regulator. It oversees the enforcement of these laws and has the power to hold negligent developers and landlords to account.
The act also introduces a new legal requirement for developers to remediate unsafe buildings at their own expense. Under the Developer Pledge, major developers have committed to fixing fire safety defects in properties they built. Leaseholders in buildings over 11 meters tall are now protected from bearing the costs of remediation under the Leaseholder Protections clause.
Another major change is the Fire Safety Act 2021, which clarifies fire risk assessment criteria for multi-occupancy buildings. It mandates that external walls, including cladding, be considered as part of fire risk evaluations. This law aims to close loopholes that previously allowed building owners to ignore cladding risks when assessing fire safety.
The government has also introduced amendments to the Defective Premises Act 1972. The new amendments extend the period during which leaseholders can bring legal claims against developers for unsafe construction. Previously, claims had to be initiated within six years, but the new legislation extends this period to 15 years for new builds and 30 years for older buildings.
Despite these changes, enforcement remains a challenge. Some developers have resisted paying for remediation, leading to legal battles and further delays. The government continues to monitor compliance and has threatened legal action against companies that fail to meet their obligations. Leaseholders are encouraged to stay informed and seek legal assistance if their building owners do not comply with the new regulations.
The Impact on Property Values
Properties with cladding issues have lost value. Many owners cannot sell their homes because buyers are unwilling to purchase properties with such issues. Mortgage lenders often refuse to provide loans for affected buildings. As a result, leaseholders are trapped in homes they cannot sell or refinance. Some properties have seen a gradual recovery in value after receiving government funding for remediation work. However, for many, continuing uncertainty remains a major concern.
Delays in Remediation Work
Fixing unsafe buildings has been a slow process. Shortages of skilled workers and materials have caused delays. Some building owners have struggled to find contractors willing to take on cladding removal projects. Disputes over who should pay for repairs have also slowed progress. Many property owners feel frustrated as they continue to wait for work to be completed. These delays add to the stress and financial burden faced by property owners.
Insurance and Service Charge Increases
The cladding crisis has led to higher insurance costs. Many insurers have raised premiums for buildings with cladding issues. Some have even refused to provide coverage. This has left property owners paying much higher service charges. Many people have also had to pay for expensive interim safety measures such as waking watch patrols. These costs add up, making it difficult for owners to afford their homes.
Health and Safety Concerns
Living in a building with unsafe cladding creates ongoing health and safety risks. Many residents feel anxious about potential fires and lack confidence in building safety measures. Fire services have been called frequently to inspect high-risk buildings. Some residents have been forced to stay in temporary accommodation while waiting for remediation work to be completed. The mental and emotional strain of living in an unsafe home has affected many property owners.
Developer and Builder Accountability
The government has taken steps to hold developers and builders accountable for using unsafe materials. Some construction companies have been required to pay for cladding removal and safety upgrades. However, not all developers have accepted responsibility. Legal action has been taken against companies that failed to follow safety regulations. While progress has been made, many property owners still struggle to get financial support from those responsible for unsafe cladding installation.
What Property Owners Can Do
Property owners should stay informed about the latest government support schemes and legal changes. The best way to do this is by regularly checking government websites, news sources and leaseholder advocacy groups. The more informed property owners are, the better they can navigate the issues surrounding the cladding crisis.
Joining resident associations can provide valuable support and information. These groups often share updates on government funding, legal cases and remediation progress. Being part of a collective voice can also help when lobbying for policy changes or seeking financial assistance from developers.
Legal assistance may be necessary for those facing financial burdens due to cladding issues. Property owners should consult lawyers who specialise in property and leasehold disputes. Many leaseholders have been able to challenge unfair costs in court, particularly where developers or freeholders should be held accountable.
If a property still has dangerous cladding, owners should ensure that fire safety measures are in place. Consulting fire safety professionals and following government guidelines can reduce risks while waiting for remediation.
Conclusion
The cladding crisis continues to be a significant issue. While progress has been made in removing unsafe materials, many property owners still face financial challenges and long delays. Government support has helped some, but gaps in funding remain. Owners must stay informed and take action where possible. The road to resolution is slow, but staying engaged with developments in policy and legal changes will be crucial for affected property owners.
FAQs
Q. What is cladding and why is it a problem?
A. Cladding is an external covering on buildings that can provide insulation and weather protection. Some types of cladding are highly flammable, making buildings unsafe in case of a fire. After the Grenfell Tower disaster, concerns grew about the safety of cladding on high-rise buildings.
Q. Who is responsible for paying to remove unsafe cladding?
A. The government has created funds to help with costs and developers are expected to cover some expenses. However, in many cases, leaseholders are still being asked to contribute. Legal disputes over responsibility continue.
Q. Can I sell my property if it has cladding issues?
A. Selling a property with cladding problems can be difficult. Many buyers avoid these properties and mortgage lenders often refuse to lend against them. If a building is undergoing remediation work with confirmed funding, selling may become easier.
Q. How long will it take to fix the cladding crisis?
A. There is no clear timeline. Some buildings have had cladding removed, but many others are still waiting. Delays in funding, labour shortages and legal disputes have slowed progress.
Q. Where can I get help if I am affected by the cladding crisis?
A. Leaseholder groups, government websites and legal professionals can provide advice. Checking eligibility for government funding may also help.
About the author
Pauzible Team
Editorial Team
The Pauzible Team consists of finance professionals and property market specialists dedicated to reinventing home ownership and BTL financing. With deep expertise across UK real estate and innovative financial products like Equity Partnership Agreements, we provide landlords and homeowners with the insights they need to unlock equity, navigate market volatility, and build sustainable wealth through property. Our mission is to make complex property finance simpler, quicker, and more accessible for everyone.
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