Owners of flats in modern blocks across the UK are receiving mortgage ratings of zero due to fire risks discovered in the wake of the Grenfell Tower disaster in 2017. Checks uncovered decades of regulatory failure and poor construction that left 200,000 high-rise flats wrapped in flammable materials.

The Property Managers Association Scotland has now written to First Minister Nicola Sturgeon offering a potential solution to the problem in the form of government-backed grants and bonds for remediation work to individual owners in flats directly affected by cladding issues. Such grants would be worth at least 1 per cent of the value of the individual property and funded from money handed to the Scottish Government through the Barnett formula.

The organisation said such grants would allow property owners to band together to combat the effects of the crisis and pay for replacement cladding. It would also enable them to negotiate lower insurance premiums, which have risen sharply since the Grenfell tragedy in 2017.

For those whom a 1 per cent grant would not be enough to remove flammable cladding, ministers are urged to consider 30-year ownership bonds. In exchange for an enhanced grant secured against the property, the bearer could pay on sale an enhanced level of land, building and transaction tax over the period. These bonds could be heritable.

Derek MacDonald, director of the Property Managers Association Scotland, told The Times: “We appreciate that the cladding issue is not entirely a devolved matter, but due to the freehold system of homeownership in Scotland, it has created huge problems for thousands of people.

“We believe that this two-pronged approach would provide much-needed assistance for many flat owners, who at the moment are facing a catalogue of nightmare scenarios through no fault of their own.”

David Reid, the body’s president, said that “in an ideal world” government would provide funding to solve the situation, but that action was needed for the safety and security of homeowners.

A Scottish Government spokesman said: “We have received the letter and will reply shortly. We understand the anxiety that homeowners affected by cladding issues face. This is a UK-wide issue that no one organisation can fix.”