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September 30, 2022


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Leaseholders face total of £250,000 insurance bill to avoid risk of eviction

Residents in Greater Manchester have been told to pay an upfront insurance bill of £250,000, after fire safety defects were found.

According to an Inside Housing report, 52 leaseholders in Compass Point in Wythenshawe, Greater Manchester, face eviction from their homes unless they each pay £5,000 in insurance premiums.

The announcement comes after the building in question was found to need fire safety remedial work, including the fitting of missing fire breaks in the timber-frame structure and the removal of timber balconies. None of this work is currently applicable for government funding under their remedial cladding programme.

Residents at Compass Point have been paying higher insurance rates since September 2011, after the building’s original insurer, Allianz, is reported to have refused to offer a new insurance policy to Clear Building Management (CBM), which looks after Compass Point.

A new insurer, Touchstone Underwriting, was found, but residents saw their insurance bills increase significantly from £300 to £3,000, as premiums rose from £12,000 to £150,000.

For next year’s insurance policy, residents are now facing another stark increase in their bills – to £5,000 each, making a combined total of £250,000. Residents have also been requested to pay the entire bill upfront rather than in monthly instalments – within 21 days.

Residents who fail to come up with this sum could risk the eviction of all residents from the residential building, as it could be deemed uninhabitable if another insurer cannot be found in time.

CBM sent an email to its 52 residents outlining the serious nature of the situation: “We will need to pay the insurer in full within 21 days of cover starting, so we are asking that you please work with us to ensure that this can happen as soon as we are able to invoice, as if the building insurance fails to be paid, the property becomes uninhabitable and none of us want that to happen.”

A resident of the block and a joint leaseholder with his partner, Tom Solan, called the new insurance fee “outrageous.” He added: “There is a WhatsApp group of residents, and everybody is incredibly worried and concerned.

“We are potentially going to lose the flat and 52 residents could be homeless. Wythenshawe is not a rich area and there are certainly people in the building who are not going to be able to afford to pay.

“It sometimes seems like the government thinks the cladding crisis is fixed, but it absolutely isn’t. We might be the first people this has happened to, but we certainly won’t be the last,” he added.

Compass Point block residents are an example of the difficulties that leaseholders are facing following changes in fire safety regulations in the aftermath of the Grenfell tower fire in 2017.

Ian Hollis from CBM added: “The unaffordability of building insurance premiums for leaseholders is the silent issue punishing leaseholders across the UK.”

Hollis also admitted that the management company had not taken a fee for its services for over a year “in the knowledge that the building’s cashflow is tight.”

If the building is deemed uninhabitable due to failed insurance payments, Compass Point residents could be evicted from their homes, though it is thought they would still be required to pay for mortgages and general upkeep.

CBM insisted: “We are doing everything we can to identify a way to get the premium funded so that this will not be an issue.”

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