Prospect Place, Cardiff Bay update – can you sell/remortgage?
Estimated reading time: 3 minutes
On behalf of our clients who own properties in the Prospect Place, Cardiff Bay development, I recently attended a ‘meet and greet answer session’ with the Directors of the Residents’ Association and representatives of the management company, Ringley.
They provided a much-anticipated update on various current question marks currently hanging over the development, namely;
- In the wake of the Grenfell disaster and the subsequent review of cladding across high-rise buildings, is each block in the development safe?
- Given that they’re vital to leaseholders looking to sell or remortgage, when will the EWS1 (External Wall System Fire Review) forms be available for each block?
- When EWS1 forms are available, will insurance premiums and, in turn, service charges, go up?
- If a block needs work, who is responsible and who will foot the cost?
I thought I’d share the information we gathered with all Cardiff Bay property owners – not just those in Prospect Place – as it’s a topic that is on the mind of many.
Background
In Prospect Place, there is the original half of the development which runs along the rear, as well as the newer section which runs along the front and waterside.
The majority of the ‘newer’ blocks have had recent cladding and/or render-related work carried out to them and leaseholders hope that, with the work complete, the EWS1 reports that have been commissioned will show no issues.
The 'older' blocks haven’t had any of these works identified or carried out as yet, but Welsh Government have commissioned intrusive surveys to determine the integrity and safety of each block. The results of these surveys are due imminently.
The expected outcome
The meeting made it clear that, sadly, Prospect Place leaseholders appear to be a long way off being able to sell to buyers requiring a mortgage.
EWS1 forms are due to be released for four of the ‘newer’ blocks by the end of 2022. Despite the work that has been carried out already, they will almost certainly reveal further issues that – in the eyes of every lender – makes them unmortgageable. The most notable issue expected to be flagged is the fire risk posed by the balconies. We were advised that despite this being a fundamental issue within the EWS1 survey requirements, no work to the timber balconies is due to be undertaken. The Residents’ Association is currently debating whether to stop all residents smoking on their balconies, though how they intend to enforce this is as yet unknown.
Welsh Government’s intrusive surveys on the ‘older blocks’ are almost certain to reveal issues, the meeting revealed. No work has been carried out to these blocks yet and, with no remedy or cost liability currently being accepted by developers Bellway or Welsh Government for any work required to this section of the development, they are considerably further away from being sale-ready than the ‘newer’ blocks, with leaseholders understandably left feeling vulnerable.
To make matters worse for leaseholders, now these long-suspected issues are going to be made ‘official’ by way of the EWS1 forms or the Welsh Government surveys, Ringley will have to declare the risks to their building insurers. This declaration will see each affected building’s insurance premium rise, in turn increasing leaseholders’ service charges to cover the additional outlay.
Each block is on a separate service charge schedule, meaning leaseholders are only liable for charges per block. In theory, the safer the block, the cheaper the service charge will be. Unfortunately, the same is true of the opposite.
Our advice
With selling not currently an option for the foreseeable future, a number of leaseholders are turning to letting out their apartment instead, and we’re helping them achieve higher than previously seen prices due to extremely limited available stock in the lettings market at present.
If you’re already letting out your property, it’s time to review the rent to ensure you’re achieving current market value. Any extra you get will help towards the rising service charges.
The information contained within this article was correct at the date of publishing and is not guaranteed to remain correct in the present day.
