Since the tragic fire at Grenfell Tower in June 2017, selling and mortgaging flats with cladding have been nearly impossible without an EWS1 form (a survey specific to a building which sets out if the building is a fire risk or not) which confirms whether the building is safe.

This has resulted in homeowners in these types of properties being imprisoned, even when it is obvious the risk is low (on some types of buildings, not all). These homeowners, in essence, have become ‘mortgage hostages’. Allegedly, there are 700,000 homeowners affected by this.

When we have been approached by a client whose property has had cladding, there has rarely been an EWS1 form available. The reason is that they need to be signed off by registered fire engineers, which there are not many, thus a backlog causing big time-delays, and they have been cost-prohibitive. We have witnessed costs of between £10,000 and £50,000!

However, several lenders from Britain’s largest banks are now considering mortgage applications thanks to guidance from the Royal Institute of Chartered Surveyors (RICs).

Generally, on the basis there are plans to remove any dangerous cladding, these lenders will lend on flats that are eleven meters or above (some lenders will consider an application for five storeys and above). There is a government guarantee that this type of property owner will not have to pay for cladding removal (eleven metres and above). However, lending may be tricky under these circumstances unless the developer has signed a contract with the government confirming they will undertake such works.

It is a noteworthy point that most of these willing lenders may not require an EWS1 form. However, they will reserve their position, of course.

Many people have been forced to change their life plans and pause their family aspirations by being unable to upsize, ultimately, stuck in limbo due to cladding! With mortgage lenders’ new lending criteria, this could allow these guys to get on with their lives.

If this affects you, and you want to know more or see if lending is a possibility, please do get in touch.