Vanessa Abrahamson Blog: Labour’s figures on the cladding crisis are far expensive

On 1 February, the Labour Party claimed that “11 million people [are] stuck in the cladding crisis”. Versions of this claim have been repeated by many Labour politicians and media outlets.

The “cladding crisis” refers to problems faced by owners of flats in medium- and high-rise buildings, who are, according to Labour, “at risk from life changing cladding costs and unsellable properties” as a result of new safety regulations following the Grenfell Tower fire.

While it is true that many people in the UK may be affected by this issue, the estimate of 11 million is far too high. Indeed it probably amounts to more than all the people who live in flats in the UK.

Our estimate, based on research published by the Ministry of Housing, Communities and Local Government (MHCLG), suggests that the true number of people financially affected is perhaps about a tenth of this.

It is not likely that “millions” of homeowners are affected, as Labour and some outlets have also reported.

Background to the “cladding crisis”

Following the Grenfell Tower fire in 2017, the government introduced new fire safety rules. Initially, these applied to all residential buildings above 18m (high-rise buildings), although in January last year, MHCLG secretary Robert Jenrick said that he wanted to include buildings of any height. The government has suggested also including all residential buildings of between 11m and 18m (medium-rise buildings).

This created a complicated situation. Building owners (freeholders) are responsible for making the building safe, but flat owners (leaseholders) are potentially liable to pay a share of the cost, meaning that they are not always able to sell their flats until the safety of the building is assured. Renters are not financially responsible for this.

It was confirmed last year that buildings without cladding did not need to provide this extra assurance, although the exact scope of the finished rules is still being considered.

On Wednesday, the government announced that it would pay for the removal of cladding for all leaseholders in high-rise buildings, and would provide a loan to pay for removal from medium-rise buildings.

Where did “11 million” come from?

Before Wednesday’s announcement, to calculate how many flats and residents might be affected, Labour says it analysed figures from the New Build Database (NBDB) and Office for National Statistics (ONS). It said that NBDB “estimates the scandal may affect up to 4.6 million properties, with an average of 2.4 residents per property.” This gives an estimate of about 11 million residents in total, which is the figure used by Labour.

Labour also cites an article in the Telegraph from 5 January, where the NBDB claim about 4.6 million properties first appeared. This article does not estimate the number of individual residents affected.

NBDB confirmed to Full Fact that it provided the data to the Telegraph, and it shared its calculations with us.

It estimated there are around 13,000 high-rise buildings in Great Britain and multiplied this by 60 properties per building in Scotland and Wales and 65 in England, totalling around 870,000 properties.

It estimated there are around 100,000 mid-rise buildings in Great Britain and multiplied this by 37 properties per building, totalling around 3.7 million properties.

Thirty-seven was NBDB’s estimate for the average number of flats in each medium-rise building, created by scaling down its estimate for high-rise flats with a ratio of 11:18.

Altogether, this produced a total of around 4.6 properties in medium- and high-rise buildings, which was then multiplied by an average number of people per property (around 2.4) to give a total of 11 million residents affected.

What is wrong with these numbers?

There are many problems with this estimate. Perhaps most importantly, it counts properties in all buildings above 11m, not just those with cladding.

The estimate of 37 properties in each medium-rise building is also not accurate, because it was scaled down using the minimum not the average heights of these buildings, and does not include other factors like floor sizes, or whether buildings are mixed-use. (MHCLG’s research estimates an average of about 19 flats in each medium-rise residential building, not 37.)

NBDB and Labour’s final estimate is also contradicted by other data on households that we already have. According to the ONS, there are 27.8 million households in the UK, and survey data from the MHCLG says that about 5.8% of English households live in flats in buildings above 11m. At that rate, only about 1.6 million properties could be affected (with or without cladding), far lower than NBDB’s estimate of 4.6 million.

Indeed, only about 20.2% of English households live in flats of any kind, which would equate to about 5.6 million households in the UK.

The MHCLG survey also found that the average household size in a high-rise flat is about 1.9 people, rather than 2.4 people, as cited by NBDB. This suggests that Labour’s claim of 11 million people affected is actually slightly more than the total number of people (10.6 million) who live in flats in the UK.

Can we make a better estimate?

MHCLG also published research on cladding in November, estimating how many leasehold flats were in buildings without it, and should therefore not be affected by the new regulations. We can use this to estimate more precisely how many could be.

Our calculations suggest that about 294,000 high-rise and 546,000 medium-rise leasehold flats are potentially affected in England, making about 840,000 altogether. If we assume the other nations have living patterns similar to England’s, then about 1 million flats would be affected in the UK.

However, not everybody living in those flats would be financially affected, because many of them are renting. (Although some may of course still be living in potentially unsafe buildings).

MHCLG data also says that about 40% of leasehold flats are owner-occupied. This means that about 400,000 owner-occupied flats might be financially affected by the new safety regulations. With the average of 1.9 people per property mentioned earlier, this adds up to about 760,000 residents.

The landlords of the other 600,000 flats might also be affected. However, we also know that most privately-rented flats are rented by landlords who own multiple properties so this probably does not amount to 600,000 landlords.

Adding these residents and private landlords together gives a total of between 760,000 and 1.36 million people who are financially affected by the cladding crisis, either as owner-occupiers or landlords.

The true number is likely to be somewhere in the middle, which would make it about a tenth of Labour’s estimate.

These numbers may also be lower in reality, because some buildings have “insignificant amounts of cladding”, which means they might not be affected by the regulations, and safety work has already been completed on some others.

What does Labour say?

Full Fact contacted the Labour Party to explain our findings. It claimed that the lower average household size in high-rise flats only makes a small difference to its headline number. What counts as small is a matter of opinion. This correction on its own would reduce Labour’s estimate by 21%.

Labour also said that some people were affected even in buildings without cladding, because banks sometimes would not lend to them, and that some buildings have other safety problems besides cladding.

These points may be true. Labour shared a report with us, which claimed that lenders might continue to need fire safety assurance for some buildings without cladding, even after the rules were clarified.

However, it is hard to verify the extent of this. And even if every medium- and high-rise flat in the country were affected in some way, Labour’s estimate would still be three or four times too high.

Nichola Venables from NBDB told us: “I haven’t sought to mislead with my figures but I do understand that they’re now being printed out of context… I did seek to give as accurate an estimate as I could with the information available at the time.

“I appreciate new estimated data is now available that may be more accurate.”

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