Flats sold for up to £900,000 have been deemed “unmortgageable” due to the number of faults found in the new builds. Buyers living in the luxury flats in Camden, London have been left “distraught” and “drained” over fears their property is now worth nothing. One resident said the flats have been valued at £0 after being brought for between £700,000 and £900,000 when the first resident moved in four years ago.
Problems in the property include leaking roofs in the communal areas and terraced, which began just months after the first leaseholder moved in, the Mirror reports.
The interior and exterior walls of the flats have since started to crack, while some windows and doors no longer open and close properly.
Despite years of reports about the building cracking, bending and leaking, the insurance company that provided the 10-year warranty has not paid out.
Now a government minister has asked Camden Council to consider whether it can prosecute the construction firm for “recklessly” signing off on the block of flats that has been judged ‘not fit for purpose’.
Resident Daniel Bruce sold his tech start-up to a bank before putting a deposit down on an £850,000 apartment but said he was sold they have been sold “catastrophically damaged homes”.
The 38-year-old said: “I feel physically repulsed by my computer – because that’s the tool I have to use to fight. I’ve had to become an activist. Fighting this has become a full-time job.
“I don’t consider myself an emotional person, but I’m absolutely distraught.
“Somebody should have done something by now. New build buyers need to know that their sign-off certificate doesn’t mean anything and their warranty might be impossible to claim against.”
Mr Bruce said his master bedroom had to be closed off due to a smell in the ensuite he believes to be rot caused by one of the leaks and parts of his ceiling have come down.
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Resident and jewellery designer Alexandra Druzhinin paid £900,000 for her flat but now “lives in fear”.
She said: “We are completely trapped. We can’t get away from this.
“I’m just absolutely drained. Not only have we lost the money we spent buying and renovating the flat, and the legal fees – but now we stand a chance of losing everything we own because we can’t get insurance.”
As a result of the problems, developer Prime Metro commissioned an expert survey back in 2020 which found evidence of movement in the building.
Two years later a second survey questioned the suitability of the foundations and found the building was unfit for purpose and potentially unstable and suggested demolition as a solution.
Prime Metro Properties based in Islington, north London, said it was limited in what it could say about the block, not wanting to “prejudice any future proceedings”.
A spokesman said the firm retained three of the block’s seven flats, as it “continues to suffer the consequences of the problems which have manifested themselves”.
He added: “Since the building began to display problems we have spent a considerable amount of our own money and time investigating, trying to get to the root of these problems, and have taken matters up with various insurers and the warranty providers, at no expense to the other lessees, and continue to do so.
“We remain committed to having this matter resolved and have kept all the lessees appraised of the issues, as well as our efforts.”
They said the firm retained three of the block’s seven flats, as it “continues to suffer the consequences of the problems which have manifested themselves”.
Michael Gove, Secretary of State at DLUHC, has offered the leaseholders a meeting.
His department has now released a letter, sent to Camden Council leader Georgia Gould on May 3 by Mr Gove’s under-secretary Lee Rowley.
Mr Rowley wrote: “Departmental officials have asked your building control team to consider whether there is sufficient evidence to prosecute Salus under section 57 of the Building Act 1984, for knowingly or recklessly signing off the building.”
A conviction under Section 57 carries a maximum sentence of two years in prison or an unlimited fine.
But the leaseholders have warned others who buy new build properties that they have “no meaningful protection” legally or from insurance companies.
Acasta European Insurance Company Ltd said it was “the insurer for certain warranty and latent defect policies” at the block.
A spokesman added: “Acasta is fully engaged with and is discussing concerns raised regarding the property with all interested parties.
“We take these concerns very seriously and are committed to fulfilling any obligations under the relevant insurance policies.”
