We know how difficult the cladding issue and its impact has been on our shared owners and leaseholders. Whilst it is in our power to progress any cladding works, for those who have been seeking to sell, re-mortgage or seek to buy more of their property, we know that mortgage providers have been risk adverse. In our opinion and by many across the sector, they have been incorrectly applying the rules around cladding and safety works (meant for buildings over 18 metres) and applying it to buildings under 18 metres.
Despite intervention by the Royal Institution of Chartered Surveyors (RICS) to clarify the situation around buildings under 18 metres with mortgage lenders earlier this year, we are aware that lenders have continued to seek information around cladding and whether work has been undertaken to make it safe.
On 21 July the Secretary of State for Housing, Communities and Local Government – Robert Jenrick, announced that following the expert panel that he commissioned, EWS1 (external wall system) forms should not be a requirement on buildings below 18 metres. He goes on to say, “I am pleased that all major lenders have welcomed this advice. HSBC UK, Barclays, Lloyds Banking Group and others have said that the expert advice, and our clear response, paves the way for EWS1 forms to no longer be required for buildings below 18m and will help further unlock the housing market. I hope and expect other lenders to follow suit swiftly.”
To read his full statement, please go to https://www.gov.uk/government/speeches/proportionality-in-building-safety
We have been keeping a close eye on how the key players are responding since Jenrick’s announcement. A joint statement from UK Finance and the Building Societies Association (BSA) stated,
“Flats should be safe places to live so we welcome the government’s expert panel view that there is no systemic risk from fire in medium and lower-rise blocks.
“We also welcome the actions the government has outlined today, including the withdrawal of the current Consolidated Advice Note on cladding, and urge them to continue to work with relevant stakeholders to ensure all documents, including the RICS guidance, align with the views of the expert panel.
“Once these changes are made, both borrowers and lenders should be in a clearer position and know what is expected of them”
It is our opinion that mortgage lenders are unlikely to change their current approach on lending to properties that have cladding in the immediate future. Whilst this seems to go against what Robert Jenrick announced last month, it is expected that lenders will still want a clear position to make their decisions upon. The actions the government are taking over the next few months, along with the introduction of the new standard by the British Safety Institute (BSI), outlined below, hopefully means that mortgage lenders will then be able to update their lending processes.
Mount Green update
A new British Standard is expected to be introduced from September 2021 which will be a code of practice for undertaking risk assessments on the outside of buildings. It is expected that this code of practice will determine whether remedial works are required on a building. Advice from fire engineers is to wait until the new British Standard is released before committing to any works to ensure that it is needed under the new code of practice.
We will keep abreast of future announcements and will inform you of any changes. We have a residents’ meeting scheduled for 26 August 2021 at 5pm. If you would like to attend the meeting, please can you contact email@example.com by 25 August so that the zoom details can be sent to you. There will be further upcoming meetings planned once we understand how the new British Standard will impact our blocks.
If you have any questions, please don’t hesitate to get in contact with Customer Services on 01372 379555.