The requirement for people purchasing flats in smaller housing blocks to provide safety information to qualify for a mortgage has been scrapped. Government officials have confirmed that no longer will those buying flats in buildings lower than 18 metres need to verify the condition of the external walls and cladding, a safety measure brought in following the Grenfell Tower tragedy.
The change has been welcomed by major lenders, including Barclays, HSBC, and Lloyds, who said that industry guidance updates ensure clarity for lenders. Flat owners and prospective buyers have faced major problems selling and buying homes since 2017 due to concerns regarding the costs associated with the removal of flammable cladding.
72 people lost their lives in the Grenfell Tower tragedy four years ago, attributed primarily to the use of dangerous cladding on the exterior of the building. Subsequent investigations discovered that similar cladding remains in place on thousands of housing blocks across the UK.
Where projects have been undertaken to remove or replace the material, the costs have fallen to the owners of the flats within the building. Many of which have found themselves with negative equity and unable to sell their homes.
Mandatory safety assessments
In order to qualify for a mortgage, applicants looking to purchase a property in a tall building with potentially flammable cladding were required by mortgage lenders to provide a formal assurance of safety. This was provided in the form of a sign-off form, also known as EWS1, which was verified by a safety assessor to indicate that the building was not a high-risk property.
It was only those who owned flats in buildings known to be fitted with flammable external cladding that were required to obtain an EWS1. However, many mortgage lenders began expanding the requirements to a broader and more diverse range of buildings, making it difficult or impossible for thousands of prospective buyers to qualify for a mortgage.
Last week, Housing Secretary Robert Jenrick announced that the government’s guidance would be adjusted to exclude property owners in low-to-medium-rise blocks from this requirement. The statement from the government indicated that the move was prompted by updated advice from fire safety experts, who reached the conclusion that formal fire safety checks were not necessary for such properties.
“In the small number of cases [in purpose-built tower blocks below 18 m] where there are known concerns, these should be addressed primarily through risk management and mitigation,” Mr Jenrick said.
“Fire-risk assessors and lenders should not presume that there is a significant risk to life unless there is evidence to support this.”
“This would ensure that they respond only to the evidence and adopt a far more proportionate and balanced approach.”
He also stated that while he was satisfied with the positive response from most major lenders so far, not all mortgage providers had yet confirmed alterations to their lending policies.
“I hope and expect other lenders to follow suit swiftly,” he said.