RICS Cladding Update – Is help becoming available for remortgaging flats?
Friday 29 July, 2022
Mortgages for flats and the sale of flats within buildings above 11 metres has been highly impacted by the issues around the use of unsafe cladding in the construction of the buildings. Additionally, the costs involved and the ownership of the problem to resolve the fire safety issues the incorrect cladding materials have created has become a hot potato for the government and building contractors alike.
Many of the leaseholders that own flats within these buildings have felt they are trapped with huge repair costs that shouldn't be their problem. This is coupled with the inability to sell or remortgage as the lenders were not willing to lend on properties they felt were unsafe.
In some cases, the owners’ problems were exaggerated by having taken 100% mortgages when they bought flats. As a result of the cladding controversy, it has caused the property prices to fall, so owners are now saddled with negative equity.
Help on hand for flat owners
Thankfully, there are now signs that some of these lending issues will be removed with the introduction of government policy and RICS support alongside some of the high street lenders.
Further to the Building Safety Act, mortgage lenders and RICS have published a statement to help clarify the lending position for buildings impacted by building safety concerns. This follows on from a previous statement that was released earlier in the year.
Katherine Mumford, Thomas Oliver’s specialist Mortgage Broker in Tottenham, North London said:
“The actions being taken to protect both current and future owners of the flats impacted by the fire safety concerns will help to unblock the lending and sales of the properties. It seems that we are finally going in the right direction and leasehold properties will soon hopefully not continue to be blighted.”
If you have been impacted by the cladding controversy and are finding it difficult to remortgage your flat, speak to Thomas Oliver’s specialist mortgage brokers.
To read both statements in full, simply click the following links:
March 2022 Statement https://www.rics.org/uk/news-insight/latest-news/news-opinion/lenders-update-ews1-assessments-and-mortgage-lending/
July 2022 Statement https://www.rics.org/uk/news-insight/latest-news/news-opinion/statement-to-support-leaseholder-protections-in-building-safety-act/
