Cladding Crisis: What Block of Flats Owners Need to Know before 2026

Introduction

The 2017 Grenfell Tower tragedy changed everything for UK block of flats owners. What followed was a cascade of fire safety regulations, cladding surveys, and eye-watering remediation costs that have left thousands of property owners in financial distress.

If you’ve received an EWS1 form rejection, a fire risk assessment flagging dangerous cladding, or a six-figure remediation bill, this guide is for you. We’ll break down your legal obligations, potential costs, funding options, and alternative solutions including selling your block to specialist buyers.

Understanding the UK Cladding Crisis

What Happened?

Following the Grenfell Tower fire in June 2017, which claimed 72 lives, investigations revealed that combustible cladding materials (particularly Aluminium Composite Material or ACM) were widely used on UK buildings.

The government responded with:

• Immediate ACM cladding bans on new buildings
• Retrospective fire safety assessments for existing buildings
• The Building Safety Act 2022
• Various remediation funding schemes

How Many Buildings Are Affected?

Government estimates suggest:

• Over 11,000 buildings require cladding remediation
• Approximately 700,000 homes are impacted
• £15+ billion total estimated remediation costs
• Average cost per building: £1.5-£3 million for medium-rise blocks

Types of Dangerous Cladding

ACM Cladding (Aluminium Composite Material)

The most dangerous type, with a combustible polyethylene core. This is what was used on Grenfell Tower.

Risk Level: Severe
Typical Removal Cost: £30,000-£70,000 per building

HPL Cladding (High-Pressure Laminate)

A decorative cladding system that can be combustible under certain conditions.

Risk Level: High
Typical Removal Cost: £25,000-£50,000 per building

EPS/PIR Insulation

Expanded polystyrene or polyisocyanurate foam insulation used behind cladding panels.

Risk Level: Medium to High
Typical Removal Cost: £40,000-£100,000+ per building

Timber Cladding

Natural timber cladding without proper fire-resistant treatment.

Risk Level: Medium
Typical Removal Cost: £20,000-£60,000 per building

Your Legal Obligations as a Block Owner

The Building Safety Act 2022

Under this legislation, building owners (freeholders) have clear responsibilities:

For Buildings Over 18 Metres (High-Rise)

• Register with the Building Safety Regulator
• Appoint an “Accountable Person”
• Conduct regular fire risk assessments
• Maintain a Safety Case Report
• Report all fire safety incidents
• Fix identified issues within specified timeframes

Penalties for non-compliance: Unlimited fines and/or imprisonment

For Buildings 11-18 Metres (Medium-Rise)

• Less stringent requirements but still legally responsible
• Must ensure fire safety compliance
• May need EWS1 forms for mortgageability

For Buildings Under 11 Metres

• Standard fire safety responsibilities apply
• May still face cladding issues affecting insurance or sales

The Regulatory Reform (Fire Safety) Order 2005

This remains in force and requires all commercial and multi-occupancy residential building owners to:

• Conduct fire risk assessments
• Implement safety measures
• Keep records up to date
• Review assessments regularly

Non-compliance penalties: Up to 2 years imprisonment and/or unlimited fines

The True Cost of Cladding Remediation

Direct Remediation Costs

Cladding Removal and Replacement:

• 10-unit block: £150,000-£350,000
• 20-unit block: £300,000-£700,000
• 50-unit block: £750,000-£1,500,000
• 100+ unit block: £1.5m-£5m+

Additional Fire Safety Works Often Required:

• Fire doors replacement: £800-£1,500 per door
• Compartmentation works: £30,000-£80,000
• Fire alarm upgrades: £20,000-£60,000
• Sprinkler system installation: £80,000-£200,000+
• External wall insulation: £50,000-£150,000

Hidden Costs

Professional Fees:

• Fire safety consultants: £5,000-£15,000
• Structural engineers: £3,000-£10,000
• Project managers: 5-10% of total works
• Building control: £2,000-£8,000

Interim Measures:

• Waking watch services: £500-£1,500 per day
• Temporary fire detection: £10,000-£30,000
• Emergency lighting: £5,000-£15,000

Legal and Administrative:

• Solicitor fees for leaseholder disputes: £5,000-£20,000+
• Accountancy for service charge accounts: £2,000-£5,000
• Expert witness fees if litigation occurs: £3,000-£10,000 per day

Total Cost Example

24-unit block built in 1995, 15 metres high:

• Cladding removal: £420,000
• Fire door replacement (96 doors): £115,000
• Compartmentation works: £55,000
• Fire alarm upgrade: £38,000
• Professional fees (10%): £62,800
• Waking watch (6 months): £90,000
• Legal fees: £12,000

TOTAL: £792,800 (£33,000 per flat)

Funding Options for Cladding Remediation

1. Building Safety Fund (BSF)

Eligibility:

• Buildings 11 metres+ with unsafe cladding
• Built or refurbished between 1992 and June 2017
• Leaseholders who can’t afford to pay

Coverage:

• Up to 100% of cladding remediation costs
• Does NOT cover non-cladding issues
• Does NOT cover professional fees or waking watch

Status: Most funding already allocated, limited new applications accepted

Application Timeline: 6-12 months for approval, 12-36 months for works completion

2. Cladding Safety Scheme (CSS)

Replaced the BSF for medium-rise buildings (11-18 metres).

Coverage:

• Similar to BSF but expanded eligibility
• May cover buildings outside original BSF timeframes

Status: Check gov.uk for current application windows

3. Leaseholder Protections

Under the Building Safety Act 2022:

Full Protection (no costs):

• If property value under £325,000 (outside London) or £175,000 (in London)
• If you’ve owned the property for less than 5 years

Capped Costs:

• £10,000 maximum (outside London, property value over £175,000)
• £15,000 maximum (London, property value over £325,000)

Who Pays: Developers, building owners, or manufacturers depending on circumstances

4. Developer Contributions

The government has secured commitments from major developers to fund remediation of buildings they constructed. Check if your block’s original developer is on the pledge list.

5. Manufacturer Claims

Some building owners are pursuing legal claims against cladding manufacturers. This is complex, expensive, and can take years.

6. Service Charges

If no other funding is available, costs fall on leaseholders via service charges—but protections now apply (see above).

What Happens if You Can’t Afford Remediation?

The Reality

Many freeholders find themselves in an impossible situation:

• Funding applications rejected or insufficient
• Can’t sell the block (unmortgageable)
• Can’t afford remediation costs
• Leaseholders refusing to pay increased service charges
• Insurance premiums skyrocketing or coverage withdrawn
• Facing personal bankruptcy

Your Options

1. Negotiate Extended Payment Plans

Work with leaseholders to spread costs over longer periods, though this doesn’t reduce the total burden.

2. Refinance (If Possible)

Very difficult with cladding issues, but some specialist lenders may help if remediation is funded and underway.

3. Government Intervention

Keep lobbying your MP and waiting for additional funding schemes, though this is uncertain.

4. Sell to a Specialist Buyer

Companies like Citywide Blocks buy blocks with cladding issues, factor remediation costs into their offer, and take on the responsibility.

Case Study: From £680k Cladding Bill to Clean Exit

The Situation

A property investor in Manchester owned a 16-unit block built in 2003. A fire risk assessment identified:

• Dangerous ACM cladding requiring removal
• Inadequate compartmentation
• Non-compliant fire doors
• Total estimated remediation: £680,000

The Building Safety Fund application was rejected (block built after 1996 cutoff initially). Leaseholders couldn’t afford £42,500 each. The freeholder faced:

• Waking watch costs of £18,000/month
• Insurance renewal refused
• Mortgage lender demanding immediate action
• Personal guarantee on the freehold loan

The Solution

Sold to a specialist block buyer within 5 weeks:

• Buyer conducted own fire safety assessment
• Offered price accounting for full remediation costs
• Covered all legal fees
• Completed before next mortgage payment due
• Owner avoided bankruptcy

Final outcome: Owner lost equity but escaped crushing debt and restored financial stability.

The EWS1 Form Explained

What Is It?

The External Wall System (EWS1) form is a fire safety assessment document that confirms whether a building’s external walls pose a fire risk.

Why It Matters

Most mortgage lenders require an EWS1 form before lending on flats in buildings with external cladding. Without it:

• Properties become unmortgageable
• Sales fall through
• Property values plummet
• Remortgaging becomes impossible

Who Completes It?

Only qualified fire engineers or building surveyors with specific expertise can complete EWS1 forms.

Cost: £2,000-£10,000+ depending on building complexity

Possible Outcomes

B1 Rating: Remedial works required (worst outcome)
B2 Rating: Professionals recommend remediation
A1 Rating: No combustible materials (best outcome)
A2 Rating: Combustible materials present but acceptable

Insurance Challenges for Affected Blocks

Premium Increases

Blocks with cladding issues face dramatic insurance cost increases:

• 200-500% increases common
• Some blocks seeing £5,000/unit annual premiums
• Group policies often cancelled entirely

Coverage Limitations

Insurers may:

• Exclude fire damage claims
• Require waking watch as condition of coverage
• Impose strict remediation timelines
• Refuse to renew policies

Finding Alternative Cover

Specialist insurers exist but charge premium rates. Some blocks become effectively uninsurable, creating legal and mortgage problems.

Impact on Property Values

Sales Data Shows

Properties in blocks with known cladding issues have seen:

• 20-40% value reductions common
• Some properties becoming unsaleable
• Transaction volumes down 60-80%
• Time on market increasing by 6-12 months

The Unmortgageability Problem

Without an acceptable EWS1 form:

• Cash buyers only (dramatically reducing buyer pool)
• Values drop to reflect this limitation
• Buy-to-let investors avoid entirely

Leaseholder Revolt: Legal Considerations

Service Charge Disputes

Many leaseholders are refusing to pay cladding remediation costs via service charges, leading to:

• First-tier Tribunal cases
• Court proceedings
• Leasehold forfeiture threats
• Collective action groups

Your Legal Position as Freeholder

Under lease terms, you typically have the right to recover costs via service charges, BUT:

• New legislation limits leaseholder liability
• Courts increasingly sympathetic to leaseholders
• Legal costs of enforcement may exceed recovery
• Negative publicity affects your other properties

Mediation Options

Consider alternative dispute resolution:

• RICS mediation services
• Leaseholder engagement forums
• Phased payment agreements
• Transparency in cost breakdowns

Waking Watch: The Temporary (Expensive) Solution

What Is Waking Watch?

A temporary fire safety measure requiring trained personnel to patrol buildings 24/7, watching for fire risks.

When Required

Fire and rescue services may require waking watch when:

• Dangerous cladding identified
• Before remediation begins
• Fire alarm systems inadequate
• Evacuation plans unclear

The Cost

Typical expenses:

• £500-£1,500 per day
• £15,000-£45,000 per month
• £180,000-£540,000 per year

For a 20-unit block, this means £9,000-£27,000 per flat per year in service charges just for waking watch.

Alternatives

Some blocks have replaced waking watch with:

• Enhanced fire detection systems (£30k-£60k)
• Smoke alarms in every room
• Heat sensors in common areas

These are one-time costs vs. ongoing waking watch expenses, but require fire service approval.

Regional Variations in the Cladding Crisis

London

• Highest number of affected buildings
• Most expensive remediation costs (£3m+ common)
• Stronger leaseholder protections due to higher property values
• More specialist buyers operating

Manchester & Northwest

• Significant number of affected buildings from 2000s construction boom
• Medium-range remediation costs (£400k-£800k typical)
• Mix of high-rise and medium-rise issues

Birmingham & Midlands

• Growing problem identification as assessments continue
• Costs proportionally higher vs. property values
• Fewer funding options approved

Scotland

• Separate building regulations and legal framework
• Different funding schemes available
• Generally fewer affected buildings

Should You Sell or Remediate?

Consider Selling If:

✓ Remediation costs exceed 30% of property value
✓ Funding applications rejected
✓ Can’t afford interim measures (waking watch)
✓ Leaseholders unable or unwilling to pay
✓ Insurance cancelled or unaffordable
✓ Mortgage lender demanding immediate action
✓ Stress affecting health or other investments
✓ You’re nearing retirement and want to exit property investment

Consider Remediating If:

✓ Funding secured covering 80%+ of costs
✓ Strong cashflow from other sources
✓ Leaseholders cooperative and able to pay
✓ Long-term hold strategy (10+ years)
✓ Property values significantly exceed costs
✓ You have development/construction experience

How Specialist Buyers Handle Cladding Issues

Companies like Citywide Blocks approach cladding problems differently:

1. In-House Expertise

They employ fire safety consultants and building surveyors who understand the complexities and costs.

2. Established Contractor Relationships

Years of experience mean they have competitive pricing for remediation works.

3. Risk Tolerance

Unlike residential buyers, they’re willing to take on buildings with known issues.

4. Speed

No mortgage requirements or lender surveys mean they can move quickly—often within weeks.

5. Transparent Pricing

They show exactly how remediation costs factor into their offer, so you understand the calculation.

Taking Action: Your Next Steps

1. Get a Professional Fire Risk Assessment

If you haven’t already, commission a Type 4 external wall assessment. This costs £3,000-£8,000 but is essential for understanding your exact situation.

2. Check Funding Eligibility

Visit gov.uk and check current Building Safety Fund and Cladding Safety Scheme criteria.

3. Engage with Leaseholders Early

Transparent communication prevents costly disputes later. Consider a residents’ meeting to discuss options.

4. Get Multiple Remediation Quotes

Costs vary significantly between contractors. Obtain at least three competitive quotes.

5. Explore All Exit Options

Speak with specialist block buyers to understand what offer they might make. Compare this with the cost and timeline of remediation.

6. Consult Professionals

• Property lawyer specializing in leasehold
• Accountant for tax implications
• Financial advisor for long-term planning

Government Resources and Support

Useful Contacts

Building Safety Regulator:
Email: [email protected]
Website: www.hse.gov.uk/building-safety

National Fire Chiefs Council (NFCC):
Website: www.nationalfirechiefs.org.uk

Leasehold Advisory Service (LEASE):
Phone: 020 7832 2500
Website: www.lease-advice.org

Citizens Advice:
Website: www.citizensadvice.org.uk

Conclusion: Don’t Face This Alone

The cladding crisis has created unprecedented challenges for UK block of flats owners. Remediation costs are often beyond what individuals can afford, and funding schemes have left many buildings uncovered.

If you’re struggling with:

• Cladding remediation bills you can’t afford
• Leaseholder disputes over costs
• Unmortgageable properties
• Cancelled insurance
• Waking watch expenses draining cashflow

You have options beyond bankruptcy or financial ruin.

Specialist buyers like Citywide Blocks have helped dozens of block owners find dignified exits from impossible situations. We buy blocks with cladding issues across England, Scotland, and Wales, factor remediation costs into our offers, and complete quickly.

Facing cladding issues? Contact us for a confidential discussion about your options. No obligation, no fees, complete confidentiality.