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Fire safety liabilities risk putting off overseas funds from backing the UK residential sector, according to two large investors in the owner of London’s former Olympic Village after it was ordered to pay millions for remediation work.
The warning by the senior executives came as Get Living, which owns the freeholds of the properties on the Olympic estate, launched an appeal against a tribunal ruling in January that it should pay £18mn towards fixing fire safety deficiencies in some of the apartment blocks.
“We believe this ruling has the potential to make a significant impact on attracting investment into the UK’s [build to rent] housing market at a time of great need,” said Damien Webb, head of international at Aware Super, an Australian superannuation fund, which is one of the investors in Get Living.
Another investor, Abby Shapiro, senior vice-president Europe, at Oxford Properties, the property arm of the Canadian pension fund Omers, agreed.
She said the ruling risked putting off international investors from owning residential properties in the UK for fear of being stuck with unexpected fire safety bills as it put “the financial burden on the current owners to fund repairs that arise from construction flaws made by the original developers”.
The UK government is keen to bring in international capital to finance the building of badly needed new housing.
The two funds are investors alongside Dutch pension fund APG in Get Living, a rental housing company set up by Jamie Ritblat’s property advisory company Delancey.
The case was brought in 2022 by Triathlon Homes, the leaseholder and management company for the 1,379 affordable apartments on the Olympic estate.
It marks the latest development in the years-long controversy over who should foot the multibillion-pound bill to fix fire safety issues identified after the deadly Grenfell Tower blaze in west London in 2017.
The funds Get Living has been ordered to pay would reduce the bill to the Building Safety Fund set by the government to help with fire safety remediation works in the wake of Grenfell.
Triathlon said “overturning this decision would be devastating for thousands of leaseholders up and down the country trapped waiting for their freeholders to do the right thing”.
“Investment in people’s homes comes with responsibilities to keep the people who live in them safe and to meet the legislation that governs the housing,” it added.
Get Living argued it should not have to pay because it was not responsible for the construction of the buildings, which it bought after the 2012 London Olympic Games.
Rick de Blaby, Get Living’s chief executive, said the government, as the original developer, as well as the contractors, should foot the bill and that the company was exploring its legal options.
He added the company “never expected or requested” residents to fund the work and would not delay remediation work, which is under way.
