I’m trapped paying a mortgage on a flat that was burnt down

Two years on since a devastating fire ripped through a residential building in east London, former residents are still feeling the financial impacts. In August 2024, the Spectrum Building in Dagenham witnessed a terrible fire, and more than a hundred residents had to evacuate their homes. But they are yet to receive insurance payouts – and many residents are still paying mortgages on flats that no longer exist and will not be rebuilt. Shorts One such person is Sarah Williams, who bought her one-bed flat in 2016. At the time, she recalls being “delighted” to secure her purchase after queuing in the rain for hours, with the flats were being sold on a first-come first-served basis “There must have been well over 200 people in the queue for these flats when it went on sale. I was absolutely delighted that I was successful and I was finally able to put my foot onto the property ladder,” she said. Sarah bought her flat for £170,000, but after the Grenfell disaster in 2017, the building was assessed and found to have unsafe cladding, which Sarah said rendered it effectively “worthless”. The building was in the process of having its cladding redone when the fire broke out, which left Sarah having to stay in hotels and with friends as she attempted to get back on her feet. Despite her flat no longer existing, Sarah is still paying £750 a month towards her mortgage and still has £100,000 left to pay. She said: “The only way I am going to be able to stop paying my mortgage is when I get some money from the insurance payout. I can’t stop paying it. I have a debt to repay.” Mortgage payments continue regardless of property habitability or your ability to live there. Some mortgage contracts include payment protection insurance covering payments during specific circumstances, but house fires rarely qualify unless tied to job loss or illness arising from the fire. In November 2025, the freeholder of the building placed their company into administration, meaning the £15m insurance pay out from the fire is now sat with the administrators, and residents are uncertain when or how much money they will receive. Sarah said: “I had to redo my mortgage earlier this year, which was just ridiculous because I’m reorganising a mortgage on a property that doesn’t exist. “The problem is we’re just stuck. I must continue to pay my mortgage until I get this money that’s been sitting there for eight months.” Residents are receiving alternative accommodation money, but this was only granted for three years, leaving Sarah unsure how she will afford the £1,850 rent she is currently paying on top of her mortgage in a year’s time. Retirement left in limbo Uncertainty about when residents may receive a payout has caused people like Paul, 66, to place their plans on pause. The senior journalist, who bought his flat for £200,000 in 2016, had just taken voluntary redundancy and was planning to retire at 65 before the fire broke out. Paul emotionally recounted the events of that night, when he woke up in the early hours of a bank holiday Monday to a blaze outside his bedroom window. The Spectrum Building after the fire “The entire window was this explosive fire orange. It was just outside the window. It was completely in flames, and the room was really hot. It was smoky, and the roar of fire was just incredible,” he said. Paul started to feel drowsy and quickly grabbed three t-shirts to dress himself in and rushed to the exit. He said: “I went through the exit door and there were masses of burning embers raining down, almost like a rainfall, and some struck me. It was just horrible.” Although Paul had paid off the mortgage on his flat, losing everything has brought increased concern surrounding his retirement. “This happened shortly before I was to turn 65. I had so many treasured possessions, things that I loved. Everything was destroyed. My flat was incinerated and I don’t know what I’m going to get [from the insurance payout], and whether I’ll be able to afford a new flat in London with that amount of money, which is terrible,” he explained. Paul is currently renting and says he has no idea what is going to happen to him and his fellow residents when it comes to getting the money they are owed. He said: “I was prepared to retire. I had already taken voluntary redundancy from work. I was doing some part-time work, but I was hoping, you know, this would be a period where I would taper off and retire and life would ease up. “For this to happen just before and to lose the home that I struggled to pay for, to lose everything I owned in the world… things that cannot be replaced. It’s just horrific, and I did go into shock.” Without knowing how much money Paul will receive for his flat, he is struggling to be able to plan for his retirement and admits he will have to dip into his savings to fund his retirement, adding: “I may have to do more work.” ‘It’s giving me sleepless nights’ James says his retirement has now been pushed back “considerably” James Allchurch, 57, not only lost his own home the night of the fire but also a significant portion of his retirement income as he rented out a secondary flat in the building. The lettings agent, who now lives in Kent, bought two flats in December 2015, one for £175,000 and the other for £170,000 which he rented out for £1,000 per month. He said: “The plan was the flat was going to be our savings, our retirement for the future. I will have to push back my retirement considerably now.” James and his partner were planning to sell the flat they lived in as soon as the cladding remediation was complete and move out of London, but the fire meant those plans were pushed forward. He said: “Once the cladding remediation was finished, we wanted to sell the flat and then that would help us to buy a place in Kent. Problem is because we weren’t able to do that, we’re basically having to beg and borrow money from friends and family, and it’s getting quite uncomfortable now. It is impacting our day-to-day finances.” James is self-employed and hasn’t been able to contribute to his personal pension since the fire happened as he needs that income to pay for his property and everyday living costs. He said: “The property we bought requires a lot of renovation, and it’s been quite difficult to do a lot of that without having the funds from the flats. We’ve been sleeping in rooms that aren’t finished, dusty, sleeping on a blow-up mattress.” James admitted to having sleepless nights because of the uncertainty surrounding when he may get his payout. “There’s that doubt in the back of your mind all the time. What if I don’t get anything, or if I just get a little bit. That was our investment. If you’re a big corporation, you can write these things off, but we can’t afford to write off something like that. It’s a huge thing for us,” James added.