At least two major banks have announced a change to their mortgage rules that could benefit thousands of customers.
The change affects homeowners who live in clad buildings.
Lloyds Banking and NatWest have announced that they will revoke EWS1 certificates for those who live in blocks of flats in England five stories high or taller.
This will see mortgage service providers drop their lending ban.
The EWS1 certification gives a certain rating after high-rise properties undergo an exterior wall fire review – without this certification, most banks will not offer a homeowner a mortgage.
The change has been made since new guidance was published by the Royal Institution of Chartered Surveyors (RICS) on how property should be assessed for fire safety.
Jas Singh, Chief Consumer Lending Officer at Lloyds Banking Group, said: “We have worked closely with homebuilders and RICS to find a solution for homeowners, so we warmly welcome the updated guidance for appraisers on homes with exterior cladding.
“While we have continued to lend out cladding properties where possible, this move will simplify things for those buying homes in properties five stories or higher (11m).
“We hope this will continue to open up the market for those living in affected properties, bringing peace of mind to homeowners.”
The changes will take effect from January 9, 2023.
This means that residents will be able to apply for government funding to fix cladding problems if the building is more than 11 meters high.
Santander added that it would “consider mortgage applications in England on properties in buildings regardless of building height or whether repair work has begun, provided valid evidence is shared”.
A Barclays spokesperson said: “As a responsible lender, we constantly monitor our operations and documentation requirements to ensure they are fit for purpose.
“We are changing our policies to support the Building Safety Act, following the government’s recent announcement, and will launch these changes in early 2023.”
The Sun also asked HSBC if they plan to announce the changes, and we’ll update this story when we know more.
This comes as part of an amendment to fire safety rules following the Grenfell Tower disaster which left people in cladding properties unable to sell.
According to MoveWise, safety checks can take between 12 and 18 months and can cost up to £45,000.
After Grenfell Tower, residents can get loans of up to £50 a month, or £600 a year to fix problems, but you’ll need to check with your local council if you can get something similar.
The news comes as the Bank of England raised interest rates to a 14-year high this month.
The rate rose by 50 basis points from 3% to 3.5% as expected.
It is the ninth consecutive time that the Bank of England has raised interest rates to try to tackle rising prices.
This follows the largest single rise from 2.25% to 3% in November.
The move will make the cost of borrowing, including loans, credit cards and mortgage payments, more expensive.
But the rise is good news for savers because they may get better prices on their eggs.
Major banks use the BoE base rate to determine the interest rates they offer to customers.
This means that millions of households face higher mortgage bills – but the Bank of England’s outlook for the economy has improved.
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