An Industry Statement on Cladding

Posted by The Property Institute on 3rd January 2023 -

Leaseholders and prospective buyers will now have more clarity on purchasing homes with building safety issues following a key update from mortgage lenders and the Royal Institution of Chartered Surveyors (RICS).

Leaseholders and prospective buyers will now have more clarity on purchasing homes with building safety issues following a key update from mortgage lenders and the Royal Institution of Chartered Surveyors (RICS).

This follows the implementation of commitments made by mortgage lenders in an Industry Statement earlier this year and ensures that customers have access to a range of mortgage products when seeking to purchase or re-mortgage flats impacted by cladding.  New guidance published by RICS will help valuers value properties with cladding and enable mortgage lending on affected properties.

With the RICS guidance now in place, from Monday 9 January 2023 lenders will be able to consider mortgage applications on properties in buildings in England of 11m and over in height.  Lenders will need evidence that buildings will be self-remediated by developers or covered by a recognised government scheme* or by leaseholder protections contained in the Building Safety Act, as evidenced by a Leaseholder Deed of Certificate. (All mortgage lending is subject to regulatory requirements and individual firms’ lending policies).

RICS will continue to support valuers, monitoring the impact of the new guidance to ensure it is proportionate, fit for purpose and helps facilitate mortgage lending, while delivering a consistent approach to valuation.

Lenders are committed to ensuring that those who want to buy or remortgage flats affected by building safety issues will be able to access mortgage finance, which will restore confidence in the market.

Lenders supporting this statement as at 20 December 2022 are:

Barclays Bank, HSBC, Lloyds Banking Group, Nationwide Building Society, NatWest, Santander

RICS, the Building Societies Association, and UK Finance also support this statement.

 

*Recognised remediation schemes in England are:

The Developer Remediation Contracts (11 metres+)

The Medium Rise Scheme (11-18 metres)

The Building Safety Fund (18 metres+)

 

Source: https://www.ukfinance.org.uk/policy-and-guidance/guidance/industry-statement-cladding

 

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