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Warning issued following rise in people buying flats with unresolved cladding problems in hope of future gains

ended 11. June 2025

A conveyancer on Newspage, Chris Barry of Thomas Legal, says he is seeing more and more people strategically buying leasehold properties in buildings with unresolved cladding issues in the hope that they will see a spike in value once remedial works are complete. He warned “people considering this route need to go in eyes wide open as it is not without risks”. Meanwhile, brokers have said some investors are also buying leasehold properties in the hope that Labour will scrap marriage value. One cautioned that "some investors are speculating on a Labour-led leasehold law reform, in the hope that marriage value will be abolished. That’s far from guaranteed, so while gains could be big, the gamble is too.” Views below.

5 responses from the Newspage community

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Editor
Chris Barry
Director at Thomas Legal
Buildings with building safety issues are in low demand right now and values are dropping. This is partly due to the impending disruption of works that may need to be carried out to remediate the building, but also due to the limited number of lenders currently offering to fund these purchases. We are seeing more and more purchasers snapping up a bargain in the hope of future gains once remedial works are complete. But people considering this route need to go in eyes wide open as it is not without risks. Our legal advice needs to be very thorough in order for the perspective purchaser to understand exactly who is due to pay for remedial works and what their liability may be.
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Kundan Bhaduri
Entrepreneur at The Kushman Group
Buying single leasehold flats with cladding issues in the hope of future gains is simply silly and amateurish. No wonder retail investors get burnt so easily. The only viable move here is acquiring the entire building, taking the freehold, and running a full remediation project on your own terms - like we are doing .That’s how you strip out risk, unlock value and sell or refinance at full market price. Anything less is speculating on government goodwill and legal miracles—two things I’ve yet to see delivered by Labour. Retail buyers banking on marriage value reform or rescue policies from Ed Miliband’s office are in for a long wait and a short lesson. In this market, value isn’t found. It has to be manufactured through control, capital, and competent execution. Hope is not a business model. Professional investors don’t pray for reform. We plan for resolution and profit by taking larger, more controlled risks when others hesitate.
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Pete Mugleston
Mortgage Advisor & Managing Director at Online Mortgage Advisor
Buildings with unresolved cladding issues are an intriguing investment opportunity, but they're not without risks. Not many lenders are currently offering deals for these properties, and there needs to be a clear idea of who is going to pay for the remedial works beforehand. Similarly, some investors are speculating on a Labour-led leasehold law reform, in the hope that marriage value will be abolished. That’s far from guaranteed, so while gains could be big, the gamble is too. Due to the complexity around these properties, buyers need to seek specialist legal and mortgage advice to avoid being stung by speculation dressed as opportunity.
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Rob Peters
Principal at Simple Fast Mortgage
Ultimately, property investors look for value where they can find it. We have long seen property investors eye up leasehold flats with cladding issues or short leases, betting on remediation or reform to boost values. It can be a shrewd move, but only if buyers go in with a through understanding of the situation at hand, and the financial strength to weather delays. There are still huge uncertainties: timeframes for works, whether the building qualifies for government funding, and how long leasehold reform will take if it happens at all. Buyers need expert legal and mortgage advice and should be prepared for extended timeframes and lower liquidity.
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David Stirling
Director at Mint Mortgages & Protection
These sorts of deals would only be for the most speculative of investor, as most of the properties for sale of this type would need to be cash-buyers only. Mortgage lenders will run a mile unless the cladding has been asesessed by an appropriately qualified expert and given an EWS1 certificate. It could pay off, then again it might not.