Property Predictions: UK Cladding Debacle

Brett Alegre-wood
August 5, 2022

Video Transcription

Current Issues Cladding Aug2022

Wed, 8/3 5:01PM • 6:59

SUMMARY KEYWORDS

aws, government, metres, cladding, brexit, block, buildings, affected, risk, unintended consequences, place, insurance policy, problem, lease holders, lend, fund, corrupt, underwritten, property, put

SPEAKERS

Brett Alegre-Wood

Brett Alegre-Wood  00:01

Hey guys, so this is current issues and this is cladding. So this is, yeah. Where do you even go with this? This is just appalling abuse by the government. It there's no other way of putting this, but basically, they backed up. And then what they've done is rather than admit it, and rather than deal with it, what they've tried to do is kick the can down the road. Yeah. And the problem with that is they've forced lease holders. Yeah, you and I, to have to fund these properties, whether it be waking watch, whether it be fire, you know, systems, weather, you know, even places, you know, the recommendations, 18 metres and over. But it's still affecting places underwriting, because mortgage lenders won't lend and, you know, there's always unintended consequences. Look, I'm not here to go through all of that. And, you know, I mean, look, it's an emotional thing. And, and to be fair, it's a bloody expensive thing. I mean, some of our, I think, our worst affected people, they've got a bill there for 75,000 pounds, which the block management has stated, providing they get funding, but if they don't, you know, and it's just, I mean, there's just so many horror stories, and the government, I mean, there's no leadership and the government, they're corrupt, they're bankrupt. They're, you know, morally bankrupt. You know, they're, they should be footing this bill. They should be saying, right, we're gonna do this, we're gonna put in a plan in place, get this done, get this sorted, and have it done. But we're over five years gone by nothing much has really happened. Apart from costing, a lot of leaseholders a lot of money and the government bugger all now, where are we at with it right now. So we're actually quite a way down the way in terms of well not to solving it, this is not going to be resolved quickly. And it's not going to be resolved quickly. Because there's two issues this one

Brett Alegre-Wood  01:55

is your place affected? So do can you get an AWS one, there's not enough people to go around and do every building to an AWS one AWS one form done. If there was we'd know exactly the scale the problem, we don't know the scale of the problem yet. So that's the problem. So they should have been training people up on how to do that getting people out there doing it, then the second one is for those 1000 buildings, or 5000 buildings, or however many it is that are affected by it, we need to actually pull that stuff down and replace it. Now people are working on that, and some buildings are getting done. But it could be I think it was another 12 years, they estimate 12 years, which will make it 17 years. You know, I mean, that's just appalling. If they really wanted to do something about this, they could put the resources behind it. But the problem is the government, they don't want to pay, they want you and I to pay. And the best way to make you and I pay is by actually just letting it run on and run on and run on indecision indecision. And then number two, well, there's two things number one is, even if they have to pay for it, in the end, they're gonna pay with pounds way down the track that have been devalued over potentially this 17 years, or whatever it is. Now, the good news on the horizon is this, okay? There is more people being trained up to do AWS one. So you'd be able to get that sooner that that is one aspect. If you there's lots of people working on their cladding as well. But that's obviously, you know, there's a shortage of builders, because we had Brexit kicked all the builders out there, they all went back to their home country. So well done on the Brexit decision from that perspective. You know, I mean, there's all these unintended consequences and, you know, pro or con, Brexit doesn't matter. The facts are there, a lot of people left Britain, that were actually here doing these jobs. And so now it's very hard to get these jobs done. Anyway, that's that's another another, another discussion. So what's recently happened is this is the government has agreed to put an insurance backed system in place whereby a block management company, or a developer, we're not special developer block management company can go and they can get an insurance policy. So that the morgue sorry, not the Block Manager at the mortgage company can go and get an insurance policy to underwrite the risk that they lend on a property that has doesn't have an AWS one and turns out needs to have the cladding replaced, and the risks that they default on that. So what it means is, it's taking away the lenders risk on the thing and by taking away the lenders risk, they will now lens so that should free up the market to be able to buy and sell irrespective, but as always, you know, who wants to buy a 20 dented car or a car that's had accidents, you don't know how bad it's going to be. So, you know, unless there's an underwritten written bid from the government for the leaseholder. It's going to make it hard, you know, most people are going to prefer to buy an AWS one. So you'll find that there'll be a market disparity between that with an AWS one and that without and this is the Even for I mean, this is where it's stupid. Anything under 18 should not be affected whatsoever. Yeah. But of course mortgage fund has gone without taking that risk. Because what's the stop? The government can change their mind and things now? 15 metres, or 12 metres? Yeah. And so they're just going, you know what we want an AWS on all buildings? Yeah, I mean, fair enough, I get one or two stories, maybe not. But but you know, when we're talking about, you know, 15 metres and NASA stuff, we're finding that they're in the same boat, even though they're not right now. And who can blame them? To be fair, you know, so that's the issue, the good thing is with the insurance, it should start to free up this thing. So if you need to sell, then you will be able to sell, but I think there's still going to be a premium that you're going to have to discount off, what would be the true value, if it had the AWS one, I think that's going to continue until they sort something out. But let's face it, with the Housing Minister changing every five seconds, I think we've had 13 in 11 years or something like that. It's just ridiculous. There's no leadership, there's no direction, and that's really causing all sorts of problems. So guys, hopefully I'd update to where we're at with the cladding, you know, where your individual building will be, will depend on, you know, what the block managers is, how proactive they've been, how quickly they've got on top of it, what funding they've got, whether you get funding for that from the government will be another story because we just don't have any clarity on that either. There's lots of statements being made by politicians. And then we haven't heard a single thing of that again. So I don't think they even know I think they're telling stuff to the people that they are in front of at the time, and they're not backing up with any you know, that's the corrupt politic political environment we live in right now. Okay, so if you have any questions, just down below, you can put any questions about anything in property, and I'm happy to record a video put it on social media ready for you. So yeah, feel free to fill that out. And yeah, good luck,

Brett Alegre-Wood  06:53

and we'll chat soon. Bye.

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