It was in April 2018 that Danyal Aziz reserved a shared-ownership flat at the Paragon in Ilford, east London. The development, built with government funding to provide affordable housing, was supposed to be completed that November and Aziz was told he must obtain a mortgage offer within 28 days of the reservation or risk losing the property.

A year on, he had no moving-in date. Three successive mortgage offers had elapsed and when, in August 2019, he applied for a fourth, he entered an unnerving limbo. His lender would not value the flat until it received official assurances about the safety of the cladding which developer, Nu Living, seemed unable to provide.

Aziz is among an estimated 500,000 people to have been trapped in temporary accommodation or unsaleable homes because of confusion over new fire safety guidelines.

In December 2018, the government issued advice on the materials and maintenance of cladding on high-rise buildings to ensure that they were not combustible following the deaths of 72 people in the Grenfell Tower fire in 2017, for which flammable cladding was blamed.

Cladding on buildings more than 18 metres high, which may have been in line with old regulations, must now be examined to ensure it complies with new stringent guidelines. A tower is only deemed safe if a 9 metre model of its combustible wall system has passed a fire test. Until a lender sees proof, surveyors will value the home at zero and refuse the application.

Facebook Twitter Pinterest The Paragon housing development in Ilford, London where Danyal Aziz had reserved a flat. Photograph: Karen Robinson/The Observer

The result has been chaos. A shortage of experts qualified to carry out the inspections, and the differing requirements of lenders, meant months-long backlogs.

Many buyers, including Aziz, faced being homeless as their existing tenancy agreements expired. “The flat was a joint purchase with my mum who’s been renting for 14 years,” he says. “We wanted to use the government’s affordable housing scheme to get on the property ladder. As it is, the delays have cost us around £10,000 in four mortgage application fees and 12 extra months of rent.”

Last November, a year after he had expected to move in, Aziz was advised by Nu to rescind his contract, because of problems securing the independent safety report required by his lender.

The company blamed the fact that the government had addressed post-Grenfell safety concerns with guidelines rather than regulations and, in a letter to Aziz, stated that lenders had “chosen to interpret the guidelines in their own manner, changing the criteria without notice or time frame, and leaving a large number of people in awful situations”.

Swan Housing Association, Nu’s parent company, told the Observer that initial delays were caused by its cladding supplier going bust, and then lenders began to change their interpretation of the government guidelines. It says: “Understanding exactly what is required for each one is complex and time-consuming.”

Aziz eventually moved in just before Christmas after he was offered a mortgage without the independent report. Nu has paid affected residents £1,000 compensation each and agreed to refund any mortgage renewal fees.

The government has now approved a policy drawn up by lenders, surveyors and developers, designed to streamline the safety certification required. The “Fire Safety Review” allows a wider range of professionals to confirm whether walls contain combustible materials and issue a certificate, but buildings that are found to be a risk will still have to be assessed and modified by specialists.

Thousands of buyers and sellers are still trapped, however. Jill Robinson had saved up to increase her stake in her shared-ownership flat in the Waterman building in south-east London, but has been waiting since August for her housing association, L&Q, to provide a cladding safety report to her mortgage lender.

She paid a fee for her mortgage offer to be extended, but the new deadline expired last month. “L&Q can’t give me a firm date for the report,” she says. “I’m out of pocket and no further forward.”

L&Q told the Observer responsibility for safety checks lay with the freeholder, Knight Dragon, which blamed a shortage of qualified experts. “We are caught in an unprecedented and almost impossible situation to prove compliance with guidance not in place at the time of development,” it says. “We have been working hard to find a solution and believe the Fire Safety Review provides a viable way forward. Due to the high volume of requests, the timescale cannot yet be confirmed.”

Meanwhile, scores of people who reserved shared-ownership flats in 360 Barking, another Nu Living development in east London, spent months in temporary accommodation because conflicting interpretations of safety guidelines prevented the buildings being approved.

Facebook Twitter Pinterest The Waterman building in north Greenwich, London. Photograph: Karen Robinson/The Observer

The National House Building Council, a warranty and insurance provider, insisted on the cladding of the four towers being removed to insert fire-stopping infill, although the design and installation had previously been approved by building control. Swan says it is “actively responding to rapidly changing guidance” and is awaiting approval from the London Fire Brigade, which is under “extreme workload pressure”.

Ivana Kolawski* says she was pressured by Nu to exchange on her flat last May, two months after the original estimated completion date. She was promised her keys by August when her tenancy agreement expired on her rented flat. By November, with no completion date in sight, the landlord required her to vacate the flat and she had to move into a hotel with her new baby. She was also forced to terminate her maternity leave as her reduced earnings prevented her finding a new mortgage.

Nu allowed her to rescind her contract, but it took more than six weeks and intervention from the Observer to return her £21,100 deposit. She’s still paying £85 a night for a hotel room and reckons the five-month delay has cost her thousands of pounds.

The National Housing Federation (NHF), which represents social housing providers, wants the government to coordinate the “unprecedented” checks and works, and to establish a building safety fund to pay for them.

Last month, the Ministry of Housing, Communities and Local Government announced the appointment of a consultant to identify how safety works can be accelerated, and says it is considering helping freeholders with funding. The package includes clarified and updated cladding advice to freeholders and a safety regulator to oversee the design and construction of high-risk buildings.

The MHCLG says that the government’s “upmost priority” remains resident safety, and that it has made £600m available to deal with unsafe cladding and announced legislation to strengthen enforcement powers “to hold building owners and managers to account”.

Victoria Moffett, head of building and fire safety programmes at NHF, says: “This is a huge programme of work which could take many years; in the meantime it is unacceptable that people’s lives are being put on hold through no fault of their own.”

* Name has been changed