Housing Minister proposes £600k loan scheme for broken balconies

Wednesday 10 March 2021

Residents of Les Quennevais Park could be given access to loans of up to £14,164 to help fix their balconies, if proposals from the Housing Minister are adopted by the Assembly.

Deputy Russell Labey’s proposition comes after defects arising from a problem with the original construction method have been identified in a number of balconies in Blocks A to H at les Quennevais Park Flats.

Built around 1964 on behalf of the former Housing Committee, the eight blocks each contain 12 flats, ranging from one-bedroom to three-bedroom units, with the eight flats on the two upper floors benefitting from a recessed balcony. 

Pictured: Defects have been identified in the balconies of the upper floors at Les Quennevais Park Flats.

The flats were originally sold on a 99-year leasehold basis but, since the introduction of flying-freehold legislation, the 96 flats now comprise 27 no. 99-year leasehold properties and 69 no. properties that have converted to flying-freehold. 

During recent maintenance, defects were found on a number of balconies, which stemmed for the use of precast concrete beams for the balcony structures. According to the report accompanying the Housing Minister’s proposals, these beams were not well suited for this use due to the “thinness of the concrete and associated problems of fixing the balcony hand railings, and durability problems with the outer beams, which tend to be more exposed to the elements”. 

“It is not known exactly what took place in c1964 during the build contract that led to the balconies being built with precast beams,” the report adds. “It may have been an approved design or it may have been the contractor’s decision. It is considered that even in the 1960s, the expertise of the architect, engineer and contractor should have highlighted the risks and swayed the decision away from using such beams on the balconies.”

As a result, the outer concrete beams need to be repaired but many of the owners indicated they would not be able to raise the required funds in a short timescale. 

Pictured: Deputy Russell Labey, the Minister for Housing and Communities.

The Minister for Housing and Communities is therefore suggesting to use the 99-Year Leaseholders Fund to assist the residents with the cost of the repairs because the flats were built with “a fundamental defect that ought to have been reasonably avoided”. 

Residents will be given access to loans of between £6,726 for a one-bedroom flat through to £14,164 for a three-bedroom flat to reconstruct and repair the defective balconies, with the repairs managed by Brunel Management as the Association Representative. 

It is believed that up to £450,000 of loans will be required but a total of £600,000 is available a contingency in case there is additional demand from owners, and to account for any unexpected costs, which might be discovered during the repair process.

To be eligible for the loan, residents will need to show evidence of their income and assets. They will have 10 years to repay the loan with a 2% per annum interest.

They will have the option to repay the loan on an interest only basis (capital to be repaid at the end of the loan term), or on a capital and interest (mortgage style) basis. Lump sum reductions will be permitted at any time without penalty, as well as early repayment of the full loan.

The Housing Minister’s report notes that proceeding on a personal loan basis was considered to be the “most pragmatic approach”. 

“Consideration was given to taking security on the loans through a conventional hypothec charged on the property, but the legal and conveyancing costs are considered disproportionate to the amounts being lent,” he added. 

“The risk of unsecured lending is considered to be low but were a property owner to default on the terms of the loans, then repayment would be pursued through the Petty Debts Court in line with the normal debt recovery processes followed by the Government.”