When Paul Afshar, 41, bought his one-bedroom flat in Hackney in 2007, he thought it was a dream come true. “It’s right on the canal and the area is great, but it has turned into a nightmare.”
Afshar, the chief marketing officer of a fintech company, bought the property for £195,000, with 25 per cent shared ownership, funded by a deposit of £4,000 and a £48,750 mortgage from Halifax. Initially, his mortgage payments were £190 a month and the rent and service charge he paid were about £500.
Since 2021, Afshar estimates his costs have skyrocketed by 30 per cent. The interest rate on his mortgage has increased from 3.74 per cent to an eye-watering 8.74 per cent, meaning his monthly repayment is up 51 per cent, from £268.65 to £400.28. Similarly, his service charge is now £127, and his rent £790, a total of almost £920.
Almost as galling is that Afshar’s only managed to pay off £5,436 of his mortgage, which represents just 11 per cent of the total balance, despite having a repayment mortgage for 17 years. Much of this is because Afshar’s flat needs new cladding. “I’m stuck on the standard variable rate because of the cladding and can’t remortgage my flat. I am a mortgage prisoner.”
Afshar and the other 37 leaseholders in his block were initially told their building qualified for a government-funded cladding scheme but, soon after, this position was reversed.
As their block is below 11 metres, the freeholder, housing association Southern Housing, will have to fund for the works, estimated to be between £40,000 to £100,000 per flat. “The freeholder said that we didn’t have to pay but they couldn’t commit to where the funding would come from.”
Like many caught up in the cladding crisis, Afshar is now trapped in limbo: “Psychologically it’s a heavy weight. No work has been done or commissioned. We can’t get the EWS1 form [the form which gives mortgage companies and buyers the assurance that the building is being made safe]. Without either the form or the cladding being sorted out, everything is at a standstill.”
Two years ago, Afshar moved in with his husband to a property in Leyton, which the latter owned.
“I couldn’t mentally deal with being [at my flat] and dealing with what was going on at the same time. It’s a visual reminder that this problem is hanging around my neck. Other people have moved out and in with their parents because they can’t cope with being there. You need to feel safe and secure in your home and you can’t in a clad flat.”
With permission from the housing association, Afshar let the property out but, in December, he decided to put the flat on the market.
“It was on for three months and I got one offer, which is really weird for Hackney and London. Three years ago, it was valued at £340,000 but I accepted an offer of £300,000 in January.”
As the flat was about to be sold, the tenant moved out but, since then, things have ground to a halt and there’s currently no date for exchange or completion. “It has been impossible to get the documents asked for by the buyer’s mortgage brokers, in order to satisfy their anxiety about the flat. [They’ve] asked 30 times for different documents on fire safety, cladding schedule etc. Southern Housing don’t have the answers and can’t say when they will have them.”
With his flat no longer rented out, Afshar has been carrying the cost of the mortgage, rent and service charge himself. And things are due to get worse as the latter is set to increase substantially this year – by 50 to 60 per cent – because the insurance and investigation work for the cladding has come in at £65,000, well beyond what the freeholder thought it would be.
Unsurprisingly, other neighbours are also trying to sell: “Everyone in the block is in the same position; one guy tried to sell six-to-nine months before me and the sale fell through because of this. My flat is currently under offer, but it may fall apart. Southern Housing don’t have the data the mortgage company needs.
“I’m angry at Southern Housing, the mortgage companies, and also the government. It’s arbitrary to say there’s an 11-metre cut off. A huge number of flats are going to be under the benchmark so who is paying for it?”
Afshar says the deadlock has had an enormous impact on his mental health: “Emotionally, it’s exhausting and, at the very top, you’re battling with bureaucracy, not to mention the deep anxiety… The flat that I once called home and was a dream come true has turned into a nightmare and a burden. I can’t get rid of it, and I feel like a failure because I can’t see through the dream of homeownership.”
A Southern Housing spokesperson said: “Mr Afshar has secured a buyer for his home, with the sale expected to complete imminently. Remediation work on the building’s cladding is scheduled to begin by March 2025.
“We’ve assured our leaseholders no costs for these works will be passed onto them. We understand Mr Afshar’s frustrations in the time it’s taking to start work on his building.
“There are sector-wide challenges with limited number of qualified fire engineers to assess buildings, shortage of qualified contractors able to take on complex remediation projects and delays in the planning process. We remain committed to getting remedial works on all our buildings that need them as swiftly as possible.”
