Government Reduces Pre-Mortgage Cladding Checks

After the fatal fire at Grenfell Tower in 2017 caused by flammable cladding, many blocks of flats with similar cladding were identified. In order to improve fire safety in these blocks, work to remove cladding must be undertaken. The huge cost of this work has often had to be met by flat owners and for some this has left them in negative equity.

Mortgage lenders have therefore been asking for information regarding the fire safety of blocks of flats as part of their mortgage approval process. Prospective buyers have had to obtain an EWS1 form to confirm that the property they wish to buy is safe.

Initially, this requirement only affected flats in tall buildings with dangerous cladding. Then in January 2020, the government extended its advice to include a wider range of properties, including smaller blocks and blocks without cladding.  Mortgage companies have therefore been requiring safety information as a pre-condition to many mortgages.

On the 21st July 2021, Housing Secretary Robert Jenrick announced that the guidance would now be changing to exempt low-to-medium-rise blocks from this requirement. Borrowers seeking a mortgage for a property within a block lower than 18m (59ft) in England will no longer have to provide safety details on external walls to obtain a mortgage. Mr Jenrick said major lenders had agreed to change their rules and he expected other lenders to follow swiftly.

This is good news for the owners of properties in these low-to-medium-rise blocks; some of whom have been unable to move due to their properties being valued at zero by lenders concerned about the fire risk. It will also reduce the mortgage approval requirements for prospective buyers of such properties.

The contents of this article do not constitute legal advice and are provided for general information purposes only.