Big six to start lending on remediation scheme flats in January 2023

In July 2022, we reported that six of the biggest UK lenders had committed to lend on flats undergoing building safety remediation works, subject to certain criteria and updated valuation guidance from the Royal Institute of Chartered Surveyors (RICS). The news marked a welcome step forward for leaseholders trapped in unsellable properties with Grenfell-style cladding or other historic fire safety defects.

We can now confirm that borrowers and intermediaries will be able to submit applications for mortgages on affected properties from the 9^th January 2023. This comes from a joint industry statement issued this week by UK Finance, RICS and the BSA, which explains that the publication of the latest RICS guidance for valuers means that lenders will now be able to consider mortgage applications for flats in buildings of 11 metres or more for the first time since the EWS1 crisis began.

Which properties meet the criteria?

To qualify, impacted properties must either:

• be ‘self-remediated’ by developers;
• be covered by one of the following government schemes:
  • The Developer Remediation Contracts (11 metres+),
  • The Medium Rise Scheme (11-18 metres),
  • The Building Safety Fund (18 metres+);
• or be covered by leaseholder protections contained in the Building Safety Act.

What evidence do I need?

Individual lenders should be able to advise on what documents they will accept as evidence of government remediation scheme participation and ‘self-remediation’.

The Leaseholder Deed of Certificate will provide sufficient evidence that the leaseholder is covered by the leaseholder protections under the Building Safety Act.

However, brokers are strongly advised to check individual lenders’ policies, as further documentation may be requested (e.g. a Landlord’s Certificate), depending on the lender. All requests to obtain the required documentation to support an application should be made as early as possible so as not to cause delays.

Which lenders are currently involved? (as at 20^th December 2022)

Barclays Bank, HSBC, Lloyds Banking Group, Nationwide Building Society, NatWest, and Santander all support the joint industry statement and will be ready to accept applications by the 9^th January 2023.

Read the full statement here.