Mortgage lenders to review cladding rules after declaring homes ‘worthless’

Mortgage lenders will change rules which have made thousands of homes effectively worthless because of fears of flammable cladding – even on buildings where no cladding exists.

The rules on cladding were tightened in the wake of the Grenfell Tower disaster in 2017, where flammable material on the side of the building contributed to the blaze in which 72 people lost their lives. 

Many banks now request to see EWS1 forms – which declare that the property is free of potentially dangerous cladding – before they will consider offering a mortgage. 

However, few of these surveys have been carried out because of high costs and long waits for surveyors. Residents have also faced battles with freeholders about who should pay for these checks to be carried out.

In response to a question from Labour MP Shabana Mahmood, housing minister Christopher Pincher has admitted that bank policies have had a “negative impact” on homeowners who have been left unable to sell their properties.  

He said that ministers had held meetings with mortgage lenders who “agreed a nuanced approach to risk is required”. Mr Pincher said demands for EWS1 forms were being made on a larger number of buildings than was intended.

He said: “[Mortgage lenders] are reviewing their policies and guidance to valuers on the use of the form.”

Official figures published by the Ministry of Housing, Communities and Local Government show that there are 455 high-rise buildings considered unlikely to meet the new building regulations. 

However, 300 of these blocks have yet to be fully remediated. Of those which are private residential buildings, 179 of the 207 blocks have yet to be declared safe.

Mr Pincher also confirmed that ministers had held three meetings with representatives from the insurance industry after homeowners in these blocks also reported problems taking out buildings insurance.

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