Following the 2017 Grenfell Tower fire in which 72 people lost their lives, various changes have been made to the rules around fire safety for blocks of flats. Unfortunately, these changes adversely impacted on owners wanting to sell properties with cladding issues and also meant buyers who wanted to purchase this type of property were unlikely to get a mortgage approved.
It’s estimated that the changes in legislation could have trapped thousands of homeowners who would like to sell their flat. However, the good news is that the Government, mortgage lenders and surveyors have all worked together to enable lending on affected properties from 9th January 2023 - even those over 5 storeys or 11 metres high.
Lenders will still need to evidence that buildings will be self-remediated by developers or covered by a recognised Government scheme in England - such as The Developer Remediation Contracts (11 metres+), The Medium Rise Scheme (11-18 metres) or The Building Safety Fund (18 metres+) - or by leaseholder protections contained in the Building Safety Act, such as the Leaseholder Deed of Certificate.
While not all lenders are on board yet, most of the major lenders have agreed to support buyers and sellers including: Barclays Bank, HSBC, Lloyds Banking Group, Nationwide Building Society, NatWest and Santander.
Buying, selling or remortgaging a property with potential cladding issues: next steps
You could approach your lender or one of those listed above directly, but their lending will be subject to regulatory requirements and individual firms' lending policies, which will be impacted not just by the property, but your own personal circumstances. So it’s well worth contacting a mortgage broker, as they will understand the new policies and rules and be able to approach those lenders that are most likely to support your remortgage or purchase application.
A broker will also be able to help you understand the latest mortgage rates – which are not necessarily as high as the 6% quoted by much of the media – and explain your options if you need to remortgage, sell your property and/or buy a new one. You can contact our partners, Embrace Financial Services, via our website and book an appointment either in branch, over the phone or via video call.
If you have any specific questions relating to cladding and how it might impact you and your property, we’re always here to help. Just get in touch with your local Reeds Rains branch and speak to one of the team.
Get a Mortgage in Principle in just 15 minutes with our Embrace Financial Services**
Book a Buy to Let mortgage appointment
**A Mortgage in Principle provides you with an indication of what you can borrow, it is not guaranteed until you receive a mortgage offer from the lender.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Your initial mortgage appointment is without obligation. Embrace Financial Services normally charge a fee for their services; however, it is payable only on the submission of your mortgage application. The fee will depend on your circumstances but the standard fee is £549. Complex cases usually attract a higher fee. Embrace Financial Services will discuss and agree the fee with you prior to submitting any mortgage application.
Please be aware that the information provided within these archives has been pre-published, as of the date published on each article. The information contained within, including references to taxation, legislation, regulation, or any other issues or concerns may no longer apply.
The Reeds Rains Content Marketing Team
