Faced with dwindling interest rates on savings, John and Veronica Ierston decided to invest their modest retirement savings in property.
Fifteen years ago, the couple bought two flats in a brand new block in central Manchester. But when they attempted to sell up and release the equity last autumn, the building was found to be a fire risk and effectively worthless.
They face bills of up to £50,000 to pay for repairs, which has forced John, a self-employed accountant, to delay his retirement.
Facing disaster: John and Veronica Ierston bought two flats in a block in central Manchester 15 years ago. But when they attempted to sell, the building was found to be effectively worthless
The couple are one of a growing number of pensioners whose retirement plans have been left in tatters because of ministers’ failures to fix dangerous buildings since the Grenfell Tower fire in 2017.
Hundreds of thousands of leaseholders in unsafe flats are being hit with crippling bills to pay to fix serious safety defects that aren’t their fault.
But about four million people are now caught up in the scandal after new safety rules dramatically increased the number of homeowners unable to sell their properties.
Many are young couples whose lives have been put on hold by the crisis, but Money Mail today reveals the heartbreaking stories of pensioners who have seen their savings disappear after investing in flats to provide vital retirement income.
The Manchester building where John and Vernoica’s flats are
They bought the properties in the hope that rental income would top up small pension pots, but have seen their earnings wiped out by costly repairs.
One pensioner faces a total bill of £136,000 to fix serious safety defects, while others say their retirement has been ‘stolen’ by the Government.
Ministers have set aside £1.6 billion to fund repairs – but MPs estimate the total cost will be closer to £15 billion.
Work cannot begin in earnest until comprehensive funding is released. The leaseholders are paying at least £2.2 billion a year between them for stop-gap safety measures and insurance hikes while they wait for work to begin.
The Mail this week launched a campaign to end the scandal. We are calling on ministers to fix Britain’s dangerous buildings within 18 months and spare leaseholders the crippling financial burden.
It is being backed by MPs from all parties, including more than a dozen Tory backbenchers.
I could lose my home because I can’t afford the repairs
Khalida Ali, 58, could be liable – through no fault of her own – for work costing £136,000 at her investment properties
A healthcare professional who bought two apartments to help with her retirement plans fears the bill for safety work could cost her her home and career.
Khalida Ali, 58, could be liable – through no fault of her own – for work costing £136,000 at her investment properties, which have defective or missing firebreaks in the walls.
Because the problems do not involve cladding, the addresses at the Millennium Point and XQ7 buildings in Salford Quays, Greater Manchester, are not eligible for help from the Government’s Building Safety Fund.
Khalida (right), a single mother of two grown-up sons, says she does not have the money to fund the work and is ‘worried sick’ she will be held liable and made bankrupt — which could mean she loses her own home and is no longer allowed to practise.
She adds: ‘I bought my properties to fund my retirement. I was a single mum so worked really hard to save. I was hoping to build a pot of money so I could retire and fund any future care I might need, so I wouldn’t be a burden on my children.’
Khalida says she has ‘always tried to ensure the flats are kept in good condition and make whoever is in them feel like it’s their home’.
She has tenants in her Millennium Point flat and ‘constantly worries’ about their safety.
The second address, in the XQ7 building, is currently unoccupied because of repairs needed in the bathroom. She is unable to fund these, because the fire safety issues mean she cannot remortgage to raise the money.
Khalida, who took out home loans in 2013 and 2014, says: ‘I don’t have a great pension, which is the reason I bought these properties. I always assumed they would be safe places to invest in.
‘Now I risk losing my home if I cannot pay for the repairs, as it is collateral against the rental homes. Bankruptcy could mean I lose my job because it affects my fitness to practise.
The management company is trying to track down the developer but I don’t even know who that company is. I can’t believe that relatively new properties could be affected by this issue.
‘The developer and those enforcing building regulations have not done their jobs properly. I just feel it’s wrong that it’s landing on my shoulders. Where do I go for the money? I don’t think I’ve had any nights of proper sleep for weeks.’
Savings hit hard
The Ierstons now face a hefty bill because they do not qualify for Government cash. The £1.6 billion fund only covers the replacement of dangerous cladding, similar to that found on Grenfell Tower in London, but not other fire safety defects.
Their flats do not have dangerous cladding but are still unsafe because of a lack of fire breaks within the exterior walls.
John, 68, is still working 50 hours a week, while Veronica, 67, is a retired music teacher.
John says he and his wife did not have a survey carried out when buying the properties ‘because they were brand new, built by a reputable firm and covered by a National House Building Council scheme’.
‘We were trying to be responsible but we’re now in a nightmare that could cost us thousands’
Pensioners Joyce and Clive Mountifield face a bill of £43,000 after their flat was found to have flammable cladding.
The couple bought a two-bedroom flat in Leeds in 2003 thinking it would be sensible to invest in property for their retirement.
The 72-year-olds, from East Preston in West Sussex, thought a flat would help supplement their income because both had previously been single parents working part-time as teachers.
£43,000 bill: Pensioners Joyce and Clive Mountifield bought a two-bedroom flat in Leeds in 2003 thinking it would be sensible to invest in property for their retirement
But a safety inspection last summer found dangerously flammable cladding, with remediation work on the building set to cost £8 million.
Joyce says: ‘The flat has been a good earner for us until now. We were trying to be responsible but have ended up with a nightmare scenario where we might have to pay thousands to make the building safe.’
The pensioners received a bill for £900 in September to cover the cost of a waking watch and insurance hikes.
But at the start of December they got another bill for £2,805 to cover the installation of new heat sensors in the building.
Joyce adds: ‘It’s much worse for other people who genuinely can’t afford to pay – some have been made bankrupt.
‘There are thousands of people up and down the country in a similar situation to us. The Government needs to take action.’
But even if they had, they do not believe the problems would have been revealed, as the block was supposed to have been constructed in accordance with building regulations.
John adds: ‘We bought the homes to provide equity for our retirement, and I was hoping to reduce my work to a couple of days a week. The Government is not dealing with the issues.’
The Government says work to fix unsafe buildings is ‘progressing well’ but it has been completed on just 202 out of an estimated 11,760 affected sites. Experts believe it could take another ten years to fix all unsafe homes at the current rate.
Meanwhile, 1.27 million private flats are unsellable. New rules mean homeowners require a form to prove their building is free of dangerous cladding, but there are fewer than 300 qualified engineers to carry out checks.
The Government has promised to train 2,000 new assessors by June.
Retriement ‘stolen’
Janet Orford, 73, says her retirement has been ‘stolen’ by the Government as she faces a bill of up to £70,000 to make her flat safe.
The grandmother-of-three has also seen her insurance premium rise by more than 300 per cent, her management fees double – and has paid thousands for a 24-hour fire patrol.
She bought the one-bedroom flat in Leeds as a buy-to-let four years ago for £115,000 to provide retirement income.
My pension will be decimated by the possible £42,000 bill
Mark Berentzen is spending more than a third of his pension income on fire patrols, new alarm systems and insurance bills
Pensioner Mark Berentzen says his retirement plans are in tatters because of the crippling costs of fixing his flat.
The 58-year-old is spending more than a third of his pension income on fire patrols, new alarm systems and insurance bills after his property was found to have dangerous cladding.
He now faces remediation costs of up to £42,000 and may have to walk away from the property altogether if he is made to pay.
He and his wife bought it for their daughter for £180,000 in 2017 and decided to rent it out after she moved out.
But they have made a loss on their investment because of rising costs and expect to make ‘really substantial losses’ in the coming year and onwards.
His insurance premium was hiked by around 300 per cent – from £205 to £815 per year – and he has paid more than £4,800 on a 24/7 waking watch and a new alarm system.
Mark says he still has a tenant, but fears that he will be left without one as soon as remediation works begin. If that happens — and he is forced to pay for repairs – he will have to hand back the keys.
The former IT manager, who lives in Manchester, says: ‘Nobody is able to sell their flat under these circumstances and therefore our property, our investment, is effectively worthless.
‘It just makes you feel sick. Thinking that we might lose our flat that we bought with my inheritance from my mum and dad.
‘My wife and I thought it was a safe investment.
‘There are times when I have meltdowns over it. I have periods when I can withstand the stress, but every now and again it all gets too much.
‘We had set aside a certain amount of money for holidays. That would be gone, too.’
But it has since been valued as worthless after it was found to have dangerous cladding and missing firebreaks.
Janet, who is divorced and lives alone in Derby, is now having to pay £150 per month extra in insurance fees and had been paying £110 per month for a ‘waking watch’ – a patrol looking out for fire risks – before it was reduced to £45.
She has had to accept a 10 per cent reduction in rent payments, so she is running a deficit. She says the total bill for repairs could be anything from £35,000 to £70,000.
She says: ‘I feel like I am having my retirement stolen from me by bad decisions by the Government. I don’t sleep and it’s taking all my life savings. It’s emotional torture. We are real people, facing terrible times, and not receiving the help we deserve. The Government seems to have abandoned us.’
A Government spokesman says ‘building owners should make all buildings safe without passing on costs to leaseholders where possible’.
He adds that this has happened with more than half of the private-sector buildings with Grenfell-style cladding.
However, this accounts for just over 100 buildings. There are estimated to be 11,300 blocks with other types of dangerous cladding.
He adds: ‘We understand many people feel helpless which is why our priority is to remove unsafe materials as quickly as possible – backed by £1.6 billion of funding.
‘The National Fire Chiefs Council is clear building owners should install fire alarms to reduce or remove dependence on waking watches. Our £30 million fire alarm fund will help cover some of these excessive costs.’
