Following the horrific Grenfell fire, mortgage lenders implemented changes to lending where cladding and fire risks could potentially be an issue to the building. This means that all blocks, six-stories (18 meters) or more need to possess an EWS1 certificate. In some instances, this might also apply to blocks under six-stories if they are deemed of “concern”.
An EWS1 is difficult to get hold of because of the limited number of qualified professionals who can issue the certificate. Current estimates say it may take several years before all blocks within the requirement are able to obtain one.
Therefore, if you are thinking of selling, re-mortgaging, or buying a flat, you should be aware of the below points first:
- It’s not just about cladding
An EWS1 survey will also check the fire system, so you might struggle to sell your flat if this is not satisfactory and in line with government regulations. You may be able to spot an issue by checking the fire safety documentation for your property and comparing it to the government regulations. Other factors like the materials used on balconies can also pose an issue.
- New builds are less likely to have cladding issues
A direct reaction to the Grenfell tragedy was that the government banned the use of problematic cladding for blocks over 18 meters. This means that if you’re thinking of selling or buying a flat in a newer block – you are unlikely to face issues.
- Some lenders will demand an EWS1 even if the property does not have cladding and regardless of the height
In some cases we have experienced lenders requesting an EWS1 even when the property does not have cladding or is a smaller block (below 18 meters). This is however not the norm and if your lender/buyers’ lender does this, it might be worth speaking to a mortgage broker – we would be happy to recommend one.
- New regulations might be incoming
The cladding scandal across the country has severely affected many homeowners, therefore there is high pressure on the government to clarify and potentially ease some of their regulations. The government has already announced they are supporting more people to become qualified to complete EWS1 surveys and suggestions have been made to relax the criteria for who can issue an EWS1 certificate.
- Cash buyers are your best option
Although a very limited number of lenders might agree to a mortgage without an EWS1, the sale will likely be lengthy and subject to incredibly stringent documentation. Most flats without an EWS1 will need to be purchased by cash buyers or wait for the certification to be in place. As such, it must be expected that selling your flat will take longer and that negotiations can be harder.
What can you do if you need to sell quickly or at least cover your mortgage payments?
- Let your property
If moving is a must, then letting your property out may be your best option. Despite costs as a landlord, this is a solution that will likely cover your mortgage payments. Although, do make sure you speak to your mortgage provider and insurer first.
- Professional cash buyer companies
This is an option that may carry higher risk as it’s a less regulated industry, but it could be worth investigating if you are in need to sell urgently.
Despite the above, it’s not all bad. In the last year we have been instructed and sold multiple flats that were and, in some cases, still waiting for an ESW1 certificate. Our experience has shown that if expectations are managed and buyers are made fully aware of the ongoing situation, then sales can proceed through to a successful completion without having to heavily reduce the price.
If you are thinking of selling your flat – we would be very happy to advise on the best strategy.