In December 2022, the six big lenders reasserted their commitment to consider mortgage applications on flats in buildings affected by the building safety crisis. New guidance published by the Royal Institution of Chartered Surveyors on valuing buildings with cladding means that a valuation will now be able to take place, as an initial first step in the mortgage application process.
As part of the mortgage application process, lenders are expected to ask for evidence to inform their decisions, including confirmation that any remedial works will be paid for by government funding, or by the original developer. They may instead or also require evidence that the leaseholder qualifies for protections from costs set out in the Building Safety Act, which can be evidenced with a Leaseholder Deed of Certificate that a leaseholder can download and complete independently.
A mortgage lender may also have its own individual policies on mortgage applications, meaning some may still require an EWS1 form. EWS1 forms had previously been requested to support the vast majority of mortgage applications on flats in multi-storey buildings and typically needed to demonstrate that the building did not need remedial works to its external wall to address safety concerns.
We welcome ongoing feedback from housing associations and leaseholders on their experience of the mortgage application process. We are engaging with the government and lenders so that we and our members can support their leaseholders who want to sell or remortgage their home.