By Stephen Carew, Partner, Head of Residential Property at Penman Sedgwick
The recent boom in residential property sales caused by pent up demand from the Covid 19 lockdown and the stamp duty land tax reduction has been a real boon for many in the property industry and home owners across the country.
However, not everyone has been able to benefit. It is thought that almost half a million flat owners and professional landlords are trapped with flats which either cannot be sold or remortgaged causing heartache and misery to many.
Safety advice issued in response to the Grenfell Tower disaster has meant that lenders have not been willing to lend on flats where there is the potential for combustible cladding to be present. Lenders have been insisting that a building of 6 floors or more has an external wall system safety certificate (EWS1). Many buildings do not have such a certificate and in that event most lenders will not lend monies to a purchaser or someone wishing to remortgage. It has become increasingly difficult to obtain an EWS1 given the shortage of qualified inspectors.
In November the Government agreed that an EWS1 will not be required for buildings where there is no cladding. It was thought that this would unlock the nightmare for many owners but it seems lenders’ associations have doubted whether this agreement will be an effective resolution to the problem given that some buildings have solid brick on the outside and cladding behind such material.
The well intentioned announcement might seem to offer relief to the cladding nightmares of some but in practice this is unlikely to be so given lenders will probably still require checks to be carried out. If you own a flat in such a building then it makes sense to seek appropriate advice at an early stage.