£1m 'down the drain' as danger flats set to close

Up to £1m of tenants' and taxpayers' money has been spent trying to stop two dangerous blocks of flats from closing down, the BBC can reveal.

Beech Rise and Willow Rise in Kirkby, Merseyside, were due to be shut on Monday - and all their residents become homeless - because of serious fire safety problems.

Flat owners said they had been through "years of hell" spending extra money on repairs, asbestos removal and other costs while the value of their properties plummeted.

Local MP Anneliese Midgley said they had been victims of a "broken leasehold system", but the buildings' landlord said residents were responsible for their upkeep and management.

The 160-flat former council blocks were refurbished as "luxury living" apartments in 2007 and sold for up to £100,000 each.

Tenants said that as fire safety issues were identified by the fire service, it had fallen on them to pay to try to fix them.

Knowsley Council has had to spend close to £400,000 on safety patrols, which "ensured residents did not need to leave their homes".

Dave Hemmings, 72, told the BBC that when he moved into Beech House, his "only thought was how they would get my coffin out in the lift", because he expected to live there for the rest of his life.

He said: "It was fantastic when I moved in. Loads of space, nice views. But there have been four management companies in the seven years I've been here and obviously they've not used the money the way they were supposed to.

"The lifts don't work, it stinks, the building's gone down while my service charges have gone from £1,100 a year when I moved in to over £4,000 now, and I'm getting evicted."

In 2011, the original developer sold the "head lease" of the buildings to a firm run by businessman Michael Gubbay, who has a portfolio of hundreds of freeholds and leaseholds around the UK registered to several firms based in the British Virgin Islands.

His firms, or firms linked to relatives or business associates, were appointed to manage the blocks on behalf of the residents' management company.

Flat owner Mike Jones, 42, said when £330,000 was raised to pay towards fire doors and other fire safety works, thousands of pounds in professional management fees were added on.

But, he said, the works were to a poor standard and not completed and the building deteriorated.

In 2019, the head leases for the buildings were transferred from one of Mr Gubbay's offshore-registered companies to one now owned by high-profile London-based multi-millionaire investors Robert and Vincent Tchenguiz, who at one time were reported to own about 250,000 freeholds.

Mr Gubbay ceased to have anything to do with the buildings in 2021, and the BBC has learned that a subsequent 10-month delay installing a fire alarm system paid for with a £40,000 government grant meant Knowsley Council had to step in to pay for 24-hour safety patrols at a cost of £380,000.

Mr Jones said he and fellow leaseholder Elaine Shaw had joined the board of the residents' management committee in 2023 in an attempt to bring in new managing agents and to get things back on track, but said trying to fix the buildings' problems had become an impossible task.

They resigned in April when, he said, it became clear the fire service was not going to allow any extra time to try to sort out the building's fire safety problems.

"While these companies have been making money out of these buildings, they have become more and more unsafe," said Mr Jones, who paid about £95,000 for his flat.

"There was an elderly, vulnerable leaseholder with health problems who had to sleep in his car because the lifts didn't work, and he could not get up the stairs.

"He was still being chased for money and begging me to help him go bankrupt due to the stress, but passed away before we could help."

"We've been dragged through hell and have contacted anyone and everyone for help, but it all falls on deaf ears."

Mr Gubbay told the BBC he was "on holiday" and has not responded to requests for comment.

Although the Tchenguiz brothers' firm Rockwell FC100 is the landlord of the buildings and charges ground rents to the leaseholders, it does not own the buildings outright.

They are owned as part of the freehold, which was still held by housing association Livv Housing until 2022, when it sold it to a company called T R Marketing.

The dormant, Salford-based micro-company – which the BBC has not been able to contact - paid £5,000.

Livv Housing said it sold the land after a "formal valuation" and that it did so because its long-term strategy "did not include plans to build or manage any more high-rise blocks, therefore retention of the land was not necessary".

Elaine Shaw, 68, bought her flat in Willow Rise in 2007 for £66,000 plus fees.

She said she had hoped the rental income would give her a more comfortable retirement after being widowed, but now was on antidepressants and suffering from acute anxiety.

But with the building about to close, she feared her investment was now worthless.

Ms Shaw said she had no idea what the sale of the freehold meant for her or the other leaseholders who had between them paid millions of pounds for flats on the land.

She added: "I have a whole gamut of feelings - anger, outrage, and disgust at the systems and bodies which have allowed this situation to develop.

"But the most difficult feeling is helplessness. This whole thing has blighted my life."

She said flat owners' and taxpayers' money had gone "down the drain", adding: "We've been totally drained for years."

Merseyside Fire and Rescue Service said it had no choice but to order the closure of the buildings "in the absence of any suitable plans to remediate the fire safety shortfalls".

The fire service has not specified exactly what problems were forcing the closure of the buildings, and original developer LPC Living told the BBC it had received "all required approvals and certification".

Speaking after it emerged the flats would have to be abandoned after Knowsley Council's most recent £3,000-a-day safety patrols ended, MP Midgley said "historical owners and management companies have walked away from their responsibilities", adding they had "failed to carry out essential fire safety work, failed to repair broken lifts, and failed to maintain these homes to even a basic standard".

"Despite recent directors and a new management company's best efforts to remediate, the failures that have been exposed are far too great," she said.

She described the situation as a "failure of the broken leasehold system".

The government has described the wider leasehold system in England and Wales as "feudal", and that it had "fallen woefully short of the dreams of homeowners".

But it currently faces a High Court battle against its plans to abolish the leasehold system altogether, with major freeholders arguing the changes could cost them millions of pounds.

A spokesman for Rockwell FC100 told the BBC the residents' management company had "sole responsibility for managing the buildings and collecting and spending service charge money".

The spokesman said Rockwell FC100 was investigating "what has led to the current situation".

And he added: "The situation at these buildings demonstrates the real risks and consequences which will increasingly face residents up and down the country if the government introduces reforms which force professional freeholders to exit the market and instead impose responsibilities for overseeing buildings onto leaseholders, regardless of whether or not they wish to or are able to discharge these responsibilities."

Leaseholders Mr Hemmings, Mr Jones and Ms Shaw said the changes that might stop the imposition of for-profit professional management companies by landlords could not come soon enough.

Ms Shaw said: "We will fight on to the bitter end, although the odds are stacked against us.

"There is no such thing as a level playing field for 'ordinary working people', and no justice unless you are stinking rich."