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Lender criteria on flats with cladding remediation

Journalist: Anna Sagar, Mortgage Solutions / Specialist Lending Solutions

ended 22. December 2022

Looking to speak to mortgage brokers about the latest announcement that the six largest lenders will lend on properties needing cladding remediation under certain conditions. 

  1. Will this make a significant difference for buyers and sellers? Which groups will benefit the most/least?
  2. Does it go far enough? What would you like to see from lenders on cladding? 

 

 

8 responses from the Newspage community

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Tom Collier0
Director at Advantage FS
The near-blanket requirement for an EWS1 sign-off in mortgage lending on clad buildings has led to an estimated 2 million borrowers being unable to refinance, or 'cladding prisoners’. EWS1 sign-off can be expensive and result in management firms putting off arranging them, in anticipation of government funding coming through. The only notable high street exception to this was Santander, who can lend if the repair works bill does not fall to the leaseholder. However, Santander only accounted for 10.77% of the 2021 market. The big 6 lenders account for 71.68% of UK mortgage lending. Assuming the requirements to be met are reasonable, objective and transparent, then this reformed approach to lending against clad properties could free so many from their torment. This could be the catalyst ‘cladding mortgage prisoners’ have been waiting for.
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Samuel Mather-HolgateVerified
Independent Financial Adviser at Mather and Murray Financial
It's been five and a half years since the tragedy of Grenfell and only at the 11th hour do lenders agree a sensible way forward. It's a disgrace from lenders and the government that it's taken this long and that most of the remedial work has been completed. For the tens of thousands of residents living in unsafe properties that they couldn't sell, this will be considered a badge of shame on the Tories and the FCA.
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Emma JonesVerified
Managing Director at Whenthebanksaysno.co.uk
It’s about time lenders made those changes and we do feel in the broker community more needs to be done. The borrowers purchased these properties without knowing any issues would arise on 1. Getting a mortgage or 2. The impact when trying to sell. If the works going to be done and guarantees are provided for this by the leaseholder then that should be enough for the property to be mortgaged. Fingers crossed most other lenders follow suit and more steps are taken in 2023 to help these homeowners.
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Samuel GeeVerified
Director at Manning Gee Investments Limited
The EWS1 issue, or rather the lack of EWS1 issue, has caused sellers misery through no fault of their own, and frustration for buyers. This announcement can only ease that somewhat, where conditions are met, but lenders will likely still be very cautious with values correspondingly affected. This will benefit sellers who have been desperate to sell but buyers should be made aware that without the correct certificates, these flats make an unattractive purchase. No doubt surveyors will also be cautious in their valuations with the zero-value trend for mortgage purposes remaining for some time. We've seen one mainstream lender take a pragmatic view this year, and with huge effort have achieved an offer and completion on a flat without an EWS1, but it took 6 months of work behind the scenes to achieve it.
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Jonathan Burridge0
Founding Adviser at We Are Money
More lenders means more choice and these are the larger players in the market, which is reassuring for both owners and buyers. Choice means properties affected with the cladding issues can now be marketable to all buyers, not just those with cash. We have been waiting months for more details to be released with only Santander and Nationwide/TWM publishing policy. So, much will depend upon the detail. But things are looking far more positive at present.
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Scott Taylor-Barr0
Principal Adviser at Barnsdale Financial Management
This is great news for those who have been in limbo since this whole omnishambles started. It's not an ideal solution by any means and there are still those with issues that this will not resolve, plus there will be many unanswered questions, but it's a positive move for a large group of people who have seen nothing but buck-passing for years.
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Amit PatelVerified
Adviser at Trinity Finance
This is great news for both buyers and sellers as this has been a huge issue for the past couple of years. This should bring much-needed confidence back into the market.
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Austyn JohnsonVerified
Founder at Mortgages For Actors
Finally, light at the end of the tunnel.