The UK’s six largest banks will start lending properties with cladding of 11m or more from January, making it easier for homeowners to sell after years of uncertainty following the Grenfell Tower disaster in 2017.
From January 9 next year, lenders including Barclays, HSBC, Lloyds Banking Group, Nationwide Building Society, NatWest and Santander will be able to consider mortgage applications, provided there is evidence that the cladding processing work will be covered by the developers. Or the protection of the tenant or a recognized body. government scheme.
In 2017, a massive fire destroyed the Grenfell Tower building in west London and killed 72 people, prompting scrutiny of safety standards and building regulations for England’s tower blocks.
UK Finance said: “Lenders are committed to ensuring that those wishing to purchase or refinance apartments affected by building safety issues will be able to access mortgage financing, which will restore confidence in the market.”
The announcement comes after the Royal Institution of Chartered Surveyors published a framework earlier this month that aims to streamline lending by making it easier to value property using livery.
An investigation into the Grenfell disaster revealed widespread defects in the construction of the high-rise blocks, driving mortgage lenders out of the market and causing trade in the damaged homes to cease.
While high-rises with a cladding similar to Grenfell were the original focus of government scrutiny, in January 2020 ministers directed that multi-storey, occupancy residential buildings of any height must be assessed for fire risk.
Some 840,000 apartments were affected according to the government’s analysis, effectively rendering them unsaleable until the safety of the building is confirmed. People living in the damaged property have had to resort to temporary safety measures such as on-site fire monitors which cost tens of thousands of pounds.
In July, a landmark ruling in London’s High Court held that the contractor was liable for the cost of removing the unsafe cladding. The legal precedent could have serious ramifications for contractors, given that the total cost of repairing unsafe buildings is expected to exceed £10 billion.
The government estimates that the upcoming building safety levy on apartment building developers will raise £3 billion over the next decade.
“This move will make things simpler for those who buy homes in properties of five floors or more,” said Jas Singh, chief executive of consumer lending at Lloyds, the UK’s largest mortgage lender.
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Santander said it was “committed to ensuring that mortgage holders living in apartments, affected by building safety issues, are subsidized so that they can buy and sell their properties with certainty.”
Nationwide said it would lend to people in homes damaged by cladding if the properties were covered by government or developer repair plans “subject to normal lending policy and controls”.
UK bank HSBC said the changes “will provide residents with improved guidance to enable lending on cladding properties, while providing more clarity and certainty to those who live in, or wish to purchase a property in a cladding block”.
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