Our Meeting with Telford Homes – January 2024
On 25th January, we met with Telford Homes to discuss the company’s building safety remediation programme. The London-centric developer has 148 relevant buildings (over 11 metres in height) and around 15,000 homes in its portfolio, ranking it as the 7th largest to sign the Government’s developer contract in terms of the volume of buildings in scope.
We wanted to understand why the remediation programme seemed to be off to a slow start, based on government data on progress so far, and what was being done to ensure the pace accelerated so that homes would be made safe as soon as possible.
We met with Jason Newbold, Remediation Programme Director; Liam Foweather, General Counsel; Giorgia Sharpe, Remediation Engagement Lead; and Lesley Chen Davison, Chief Operating Officer.
We were told that the company was “fully dedicated” to delivering on the commitment it made under the developer contract and that they started to move quickly “as soon as it was clear what the company’s legal obligations were” – which they define as the point the final contract was signed in March 2023, rather than when the pledge was signed a year earlier. A team of 20 people has now been established with full-time focus on the remediation programme. While acknowledging that it had taken time to “get up and running”, the Telford team told us that work was now progressing “at great pace”, in their opinion.
£140m has been set aside for building safety remediation works
The amount currently set aside for remediation works is £140m, so the size of the remediation programme is expected to be quite substantial (the 9th largest amongst developers). The company’s most recent financial accounts for the year ended 31 December 2022 (published in September 2023) include a financial provision of £100m for self-remediation projects. An additional £40m has been accrued to reimburse the Government for projects already started or completed under the Building Safety Fund (BSF).
The Department of Levelling Up, Housing and Communities (DLUHC) has recently started to publish data on developer remediation progress, based on quarterly “data report” submissions from each developer. The first iteration of this report (as at the end of October 2023) does not seem to be robust enough to draw definitive conclusions or comparisons between developers, as some of the question framing has led to inconsistent interpretations from each company, although we hope this will improve over time (the next update will be published in mid-February 2024).
However, DLUHC’s publicly available data on Telford Homes shows (as at the end of October 2023):
• 148 relevant buildings (over 11 metres) were in scope of the contract.
• 75 buildings had been assessed (51% of all relevant buildings), which was below average (72%).
• 61 buildings had been confirmed to require remediation work, 81% of all assessed buildings. This remediation rate appeared very high compared to peers in the scheme (third highest).
• 11 buildings were due to be remediated via government schemes, with the other 50 buildings to be directly self-remediated.
• 0% of self-remediation buildings had started work. While Telford Homes was not the only participant developer not to have started any self-remediation projects, it was the only developer of significant scale (with more than 10 buildings identified for remediation), so this was particularly concerning.
• Only 18 buildings had a planned start date for works on site, and only 7 buildings had a start date in the next 12 months (14%).
• If that pace were to continue, the 50 self-remediation projects that had been identified (so far) would start work over a 7-year timeframe. As 49% of buildings still need assessment, more buildings might still be identified as requiring remediation in the future, which means the programme could take even longer.
66 buildings are expected to require remediation but 35 await assessment
The Telford Homes team believed that their data submissions were accurate but felt that the data points DLUHC had chosen to report didn’t fully reflect the progress Telford believes it is making – for example, where preparation is at an advanced stage, even though work has not yet started on site – so they expect rapid progress to be shown in the data in the months ahead. As DLUHC’s data is also a couple of months out of date, the team gave us the following update:
• All 148 buildings have had a desktop assessment of “as built” data, to prioritise buildings in risk order for further investigation.
• 82 buildings (55%) they are relatively confident will require no remediation work.
• 66 buildings (45%) they believe will require remediation work.
• 32 buildings (out of 66) are confirmed to have “B2” ratings, following a Fire Risk Appraisal of the External Wall, or FRAEW, carried out in accordance with the PAS 9980 standard that was introduced in early 2022.
• 23 buildings (out of 66) have an EWS1 assessment of “B2”, which pre-dates the PAS 9980 standard and needs to be reconfirmed.
• 11 buildings (out of 66) have only had a desktop study but they are currently expected to be rated “B2” and need further investigation.
• In total, 35 buildings are still waiting for a PAS 9980 survey to be started or completed. Although this is a high proportion, it was positive to hear that all of these have already been instructed and Telford anticipates that their assessment programme will be fully completed by Easter 2023.
• 20 buildings (out of 66) have had heads of terms issued and preparation for the remediation project is sufficiently progressed that the team expects to be on-site before the end of 2024.
• 13 buildings (out of 66) will be “settled” during 2024 by compensating a building owner that has undertaken remediation – this mainly relates to housing associations. We understand that other costs such as waking watch and increased buildings insurance are also being reimbursed where relevant.
• If any buildings were at Stage B or C in the BSF before being withdrawn for self-remediation, developers are expected to meet the start and/or end dates for works that were anticipated had they remained in the Fund (or any reasonable adjustment to dates must be justified to DLUHC). From the cohort of buildings that were transferred out of the Building Safety Fund at Stage C, all but one is included in the list of 20 buildings expected to start work in 2024. Although that building has been “delayed”, it is said to be next on the priority list.
• Therefore, 33 buildings (half of 66) are expected to have either started or completed remediation by the end of 2024.
The team told us: “We feel quite good about where we are – we are going to have a great 2024.” The projections certainly gave a more positive outlook for the pace of the programme in 2024 than DLUHC’s published data might suggest so far – assuming that this can be delivered in practice. However, we obviously wouldn’t want any developer to be complacent about the other 33 buildings that will still be at the back of the queue, waiting until 2025 or 2026 for work to even begin – almost a decade post-Grenfell. They acknowledged the situation remains concerning for those leaseholders and residents, but highlighted that the highest-risk buildings have been prioritised first.
Factors affecting the pace of the remediation programme
Telford estimates their remediation programme will take 5 years in total. The target dates that developers have submitted to DLUHC are not yet being publicly reported (although we have been calling on DLUHC to publish them). We were advised that the estimates they provided to DLUHC were relatively cautious – because they were based on an initial assumption that every single project might require the maximum time frame – and the team expects to beat these estimates.
For example, buildings that are sited near canals and rivers may require extra permissions to be agreed with external parties, which can add several weeks, and those that are near complex infrastructure such as railways require more detailed planning and design – but in practice not all projects will require the longer time frame estimated.
Almost all of the buildings are high-rise, and they are often on complex sites with mixed use or different freeholders and housing associations. We heard that it took quite a lot of time in 2023 to engage with every stakeholder in an effort to ensure that remediation solutions would work holistically for all parties on each site. Historically, some parties may not have acted in a very coordinated way and Telford candidly suggested that sometimes they had spent years “not trusting each other… nobody trusted us either”, and therefore building relationships has been time-consuming but essential.
Although it is taking longer to agree access terms with some responsible entities, Telford didn’t express any significant concerns or feel they were being unduly obstructed by any particular freeholders. This sounded more positive than reports we have heard from some other developers – however, we highlighted one case in Poplar, where leaseholders understand that access issues are continuing to delay their building’s PAS 9980 assessment – it was originally scheduled to take place six months ago, but no survey date has been confirmed yet. At another East London building – which had been only days away from works starting under the BSF before being withdrawn under the developer self-remediation terms and is therefore a high priority case, there are still ongoing legal discussions to ensure the freeholder is made a party to the contract. Clearly, some agreements are still outstanding, and some buildings have lost their preferred spot on the remediation timetable due to these negotiations. However, in Telford’s view, although they are still working through a small number of cases, this is just “due process” and isn’t any more challenging than expected.
Every other developer that we have spoken with has cited the shortage of skilled and experienced assessors as an issue that has affected the pace of their assessment programme. Although Telford acknowledge that it was a problem initially, they say it isn’t any longer. They frame the issue as being less about availability of assessors and more about inconsistent quality, as “the premium people are very busy” and there are “some engineers we would definitely not use”. However, we were advised that they have secured five engineers whose competence they are confident about, and every PAS 9980 survey has now been instructed. The “most contentious” assessments – the largest, highest risk, or those that had been transferred from the BSF – are said to be almost all completed and peer-reviewed, and most of the remaining assessments are on projects assessed to be lower-risk.
The most significant external factor that may affect remediation timescales is that not a single project has planning approval yet. There is an element of the unknown about how planning timescales, gateway submissions and building control may be impacted when the HSE’s Building Safety Regulator (BSR) assumes responsibility from 5th April 2024. We were asked to make use of any opportunity – for example, when our campaign team is in contact with the BSR or any local authorities – to highlight the importance of expediting planning approvals, because this is such a critical factor if remediation works are to move faster.
Disputes over remediation scope of work
A few concerns were noted regarding the quality of some of the previous surveys that had been commissioned by other parties, prior to Telford taking responsibility under the developer self-remediation contract. We heard that they had instructed peer reviews in some cases to provide quality assurance, which led to some revised opinions. The company described their approach as “not looking for a contractor-friendly solution”, but rather “looking for the right answer”. Inconsistent and poor-quality FRAEW assessments are a major concern for leaseholders and residents, especially where the verdict of a new assessment is a reduced scope of remediation work or no remediation at all.
This is particularly concerning where other stakeholders – from freeholders to insurers to mortgage lenders – do not accept the verdict of reduced or no remediation. Leaseholders in many of these buildings remain uncertain if the scope of work will be sufficient to satisfy insurers and bring down costs – particularly if they have managed to secure a reduction in the premium on the promise of a contracted developer undertaking remediation work.
In other cases, it can be freeholders that disagree with the scope of work. At one building in Lambeth, leaseholders understand that Telford has decided the building doesn’t need any remediation – although they cannot get clear confirmation on whether a PAS 9980 survey has definitely been undertaken by the developer yet. However, the freeholder apparently disagrees and says that work is needed. Unless a new EWS1 form is issued which supersedes the previous B2 rating, it is still proving impossible for leaseholders to remortgage or sell, and there may be no pathway to reduce the insurance costs if unremediated defects remain.
We are also aware of at least one case where Telford has agreed to pay for most works, but not for fire doors that the council has already declared non-compliant. Leaseholders are now being charged but many are refusing to pay because they believe it cannot be the case that defective doors are due to “wear and tear” and therefore Telford should pay.
During our meeting we did not have sufficient time to ask how the company is handling any disputes over assessments or the scope of remediation work, but we agreed to subsequently share details of the specific cases that leaseholders have drawn to our attention, and we have asked Telford to follow up these concerns with leaseholders of the relevant buildings.
We also asked how any latent defects that are discovered are being handled. We heard that the developer will come to an agreement with each responsible entity on a case-by-case basis, but that “if it’s clear these are issues that Telford Homes is responsible for, we will instruct works”, and “we will go to the extreme” to investigate and fully expose all works required, because “we only want to do this once” and they don’t want to have to return in five years’ time.
For buildings where cladding and external wall defects are being remediated under government schemes, we were advised that Telford are engaging with the responsible entity and proactively asking about fire stopping, fire doors, balconies, or other internal work that may be needed. Two examples were cited where they had “volunteered” to look at any other issues that had not been covered by the BSF or to compensate the responsible entity for any other works undertaken, but their assistance wasn’t required. The team acknowledged there may need to be a “mopping up exercise” later, to ensure all internal issues in these buildings have been addressed.
Communication with leaseholders and residents
DLUHC’s reporting includes a score for the percentage of buildings where “engagement” has been undertaken by a developer, and Telford highlighted their performance in this report – which appears to be an impressive 98%.
We don’t feel the current DLUHC communication score is particularly useful at conveying the reality on the ground (not just in relation to Telford Homes buildings, but across the board). In our own survey in October 2023, leaseholders rated both communication timeliness and quality as 1.5 out of 10 on average, and the gap between this and the average developer score of 96% in DLUHC’s report is too significant to accept. We have given feedback to DLUHC about this, because we want the Department’s reporting to be both a fair and useful assessment, and for it to ultimately encourage better communication from contracted developers.
For example, the reporting should indicate which party was engaged, because a developer that has engaged every building’s freeholder but hasn’t communicated at all with leaseholders or residents could currently score 100%. We also believe frequency and recency of communication is important, but currently one single instance of communication could count as 100%. And finally, the scoring only considers buildings that have already been assessed and confirmed to require remediation, rather than all buildings. It is clearly imperative that communication doesn’t just begin when a developer has confirmed works are needed, but that there is clear communication with all leaseholders and residents on a regular basis while they wait.
Telford’s team told us that they are investing and building up their communications activity and now have two team members working full-time on client engagement. We were advised that “comfort letters” have been provided to leaseholders via their managing agents – which can be an essential piece of communication for mortgage lenders or potential buyers, as it confirms that the company is taking responsibility for any remediation that may be required under the self-remediation terms.
However, in just over half the buildings that we are in contact with, leaseholders tell us that they haven’t received a letter of comfort. Even where a letter has been received, in almost all cases leaseholders remain unable to sell or remortgage, which they attribute to the lack of start/end dates or the lack of detail provided about the scope of works, which mortgage lenders or potential buyers often request. Clearly a comfort letter is not sufficient on its own; however it is the first important step, and these letters are not reaching a large proportion of leaseholders.
We have heard mixed feedback about communication overall, with leaseholders from some Telford buildings reporting that they are receiving no communication at all, but others citing more positive examples where communication has recently ramped up, for example with monthly update meetings. These seem to begin when buildings are a few months away from remediation starting on site.
However, it’s clear that communication about the estimated timetable and scope of work remains essential, even in buildings where the start dates may not be imminent. For example, at one building in Poplar, a significant reduction in insurance premiums has been secured for 2024 but this was predicated on commencement of the remediation works, so the insurer will be looking for a clear understanding of when the works are going to start on site.
To their credit, because Telford Homes has realised that comfort letters and other communications are not always passed on to leaseholders and residents consistently or reliably by all managing agents, they have decided to take more direct control of communications by launching their own portal. The portal uses the Dwellant platform – which one of our campaign team is familiar with and considers a positive step in terms of ensuring blockages with communication are mitigated. The portal will be piloted by five buildings for a three-month period, starting at the end of February 2024, with a view to a full rollout to all buildings by the end of 2024.
A building safety email inbox has also been set up, so that any leaseholder or resident who is having difficulty getting communication via their managing agent can make direct contact with the developer. This doesn’t appear to be signposted on the company website yet, but other parties like DLUHC or EOCS can signpost people to this (see our call to action below!).
Thank you to Telford Homes for meeting with us. As we were unable during the time available to discuss many specific building concerns raised by leaseholders, we agreed to collate these and send them to Telford for written responses. We agreed that we would meet again in the coming months, when we will continue to seek more support for affected leaseholders and residents who remain trapped in the building safety crisis.
CALL TO ACTION!
Are you a leaseholder or resident in a Telford Homes building, having issues in relation to assessment or remediation – and unable to get a satisfactory resonse via your managing agent? Please email the developer directly at [email protected], and copy us at [email protected] if you would like us to be aware of the issues being raised and to follow up if needed.
If you need to escalate your concerns to DLUHC, please email [email protected], providing the name and address of your building together with a short summary of your concerns, and detailing the attempts you have made to contact the developer. Please copy our team at [email protected] so that we can follow up where necessary.
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