Cladding and mortgages

Journalist: Anna Sagar, Mortgage Solutions / Specialist Lending Solutions

ended 14. June 2022

As we come up to the five year anniversary of Grenfell I am looking to speak to mortgage brokers about their experience with properties that have cladding and other defects. 

  1. How have lenders' attitudes changed towards cladding and other defects? How has that impacted the way you do business?
  2. What is the current process that you have to go through for these kinds of properties? Are there customers being poorly serviced? 
  3. What needs to be improved about the mortgage process? What should the mortgage industry do differently? 

2 responses from the Newspage community

The rules and regulations, as well as the proposed solutions and remedies around cladding on buildings is a mess. It seems to change every few months as successive Housing Ministers try to tackle the issue, mostly with little or no input from stakeholders. We therefore end up in a situation where any building with cladding, whether above or below 18m, is seen as an issue by lenders - requiring an acceptable EWS1 certificate to be seen as suitable security for a loan. This causes all sorts of issues as there are not enough Royal Institute of Chartered Surveyors (RICS) professionals available to perform EWS1 surveys, they are costly and due to conflicting reports and views from government many don't believe they require one, which in some cases you don't, unless of course you want to get a mortgage, in which case you do. The whole thing is in chaos and boils down to who will, or will not, take the financial hit of sorting all these properties out - with local authorities, central government, developers and home owners all fighting with each other to not be the one to pick up the bill. The word 'omnishambles' springs to mind.
Cladding is still a huge issue for many homeowners. Even where government guidance says an EWS1 form isn't needed many lenders will stipulate they get one.