A government announcement designed to help the owners of 450,000 flats that are currently unsaleable “does not solve the problem”, according to organisations representing the UK’s mortgage industry.
Last weekend – somewhat out of the blue – the housing secretary, Robert Jenrick, announced that those living in blocks of flats without cladding will no longer have to produce an “external wall system” (EWS1) safety certificate if they want to sell their home or obtain a new mortgage.
Rules brought in after the Grenfell fire, which killed 72 people in 2017, mean surveyors acting for mortgage lenders have been making extra checks to ensure a building’s construction is free of combustible materials.
Unless they are absolutely certain it is, they have been asking for the EWS1 form, which most buildings do not have. Without one the mortgage loan will not be approved.
Thousands of flat owners have been told they face months, possibly years, of being unable to sell or remortgage their homes because they do not have the form. The form is very hard to obtain because of a shortage of specialist building inspectors.
Last week, Jenrick claimed that he had the backing of UK Finance and the Building Societies Association, whose members provide the majority of UK mortgages. However, both bodies said they had not agreed to the announcement, and worse, that it changed nothing for buyers and sellers.
Originally, the process was designed for flats in high-rise blocks, typically at least six storeys, but in January, ministers said fire safety should be considered on all blocks, irrespective of height.
Countless sales and purchases, agreed during the summer property boom, have either collapsed or are in limbo because the owner cannot provide the certificate even though there is often no obvious cladding on the building.
There are only 300 or so experts certified to carry out these inspections and they have been prioritising taller buildings, and those where there is known to be a problem. Lenders fear being left with loans on homes in buildings that are subsequently found to have fire safety problems.
Frustrated flat owners who are desperate to sell have been besieging MPs (and newspapers) in an attempt to get the rules relaxed to allow people to sell their homes.
“Through no fault of their own, some flat owners have been unable to sell or remortgage their homes – and this cannot be allowed to continue,” Jenrick said last Saturday.
“That’s why the government has secured agreement that the EWS1 form will not be needed on buildings where there is no cladding; providing certainty for the almost 450,000 homeowners who may have felt stuck in limbo.”
However, a joint statement from UK Finance and the BSA this week poured cold water on Jenrick’s move.
“Lenders sympathise with the impact that the safety issues related to cladding are causing some homeowners,” it said.
“Borrowers and lenders have a common interest in ensuring that their flat is a safe place to live. Lenders will rightly support surveyors carrying out whatever steps are needed to provide that assurance where there is doubt or concern about a block’s construction.”
The statement said an EWS1 form had never been required for a building without any form of cladding or a combustible wooden balcony. “However, there are buildings which may look as though they are solid brick-built but are, in fact, clad with unknown materials behind the brick. We will continue to work with government and Rics [Royal Institution of Chartered Surveyors] in pursuit of the best solution for customers in relation to these.”
Lucy Barber, the head of residential property at the law firm Forsters, said the announcement will not actually help in practice unless lenders and surveyors relax their requirements.
“It would seem a survey is still going to be required to check for the presence of cladding in a building. This would suggest the issues with delays and long wait times for leaseholders to gain certainty are set to continue in some cases,” she said.
Meanwhile, the government has pledged almost £700,000 to train more EWS1 assessors from January. It hopes to have 200 additional assessors within a month and 2,000 within six months.