A number of major UK banks will start considering mortgage applications for flats with dangerous cladding.
Banks had previously not considered applications for flats with cladding issues following the Grenfell Tower disaster in 2017 which resulted in the deaths of 72 people. Barclays, Nationwide, NatWest, HSBC, and Santander have said they will begin considering mortgage applications from the 9th of January.
The change comes after the Royal Institution of Chartered Surveyors (RICS) gave updated guidance to surveyors when assessing the flats value for lending purposes. Lloyds are one of the banking groups who have updated their guidance, stating they will no longer require EWS1 forms for mortgage applications on properties that are five stories or higher, making applications simpler to process.
A number of leaseholders have been unable to sell on their property’s due to the lack of lending options for buyers. However, new buyers will need to prove that the dangerous external cladding will be removed.
Jas Singh, CEO of consumer lending at Lloyds Banking Group, said:
“We have worked closely with housebuilders and RICS to find a solution for homeowners, so we warmly welcome the updated guidance for valuers on homes with external cladding.
While we have continued to lend on properties with cladding where possible, this move will really simplify things for those buying homes in properties five storeys or above 11 metres. We hope this will continue to open up the market for those in affected properties, bringing peace of mind to homeowners.”
