RICS has provided guidelines on the valuation of properties with cladding
Six of the UK’s largest banks will restart lending on medium- and high-rise flats that were affected by the cladding scandal, following new guidance from the Royal Institution of Chartered Surveyors (RICS) on the valuation of properties with cladding.
From January 9, 2023, financial institutions including Barclays, HSBC, Lloyds Banking Group, Nationwide Building Society, NatWest Group, and Banco Santander will be able to consider mortgage applications on properties in buildings in England that are at least 11 metres high.
According to banking lobby group UK Finance, 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.
The cladding scandal came to light following the Grenfell Tower tragedy, which is now considered one of the UK’s worst modern disasters after investigation into the incident revealed the harrowing details of how 72 people, including 18 children, died in the fire that broke out in the 24-storey residential tower block on June 14, 2017. It was found that most of them died from the inhalation of fire fumes caused by flammable cladding or aluminium composite material, which also caused the rapid spread of the fire.
The tragedy also spelled disaster for property buyers and sellers as the cladding scandal left thousands without a mortgage or unable to sell.
“For medium and high-rise buildings in England with cladding and building safety issues, today’s announcement is a significant step to enable lending to recommence,” a UK Finance spokesperson said in a statement. “This means that lenders can more easily keep the market moving by providing a range of mortgage products for customers seeking to purchase or remortgage flats impacted by cladding.”
In addition, leaseholders and prospective buyers will now have more clarity on purchasing homes with building safety issues following the update from mortgage lenders and RICS, the Building Societies Association stated.
“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,” the association added.
On the publication of the new guidance, Janet Paraskeva, chair of the RICS standards and regulation board, stressed that the aim is “to safeguard the public interest.”
“The protections brought into law for leaseholders and the pledge made by the lending industry to provide mortgages on properties covered by these protections, have enabled us to provide guidance to valuers, ensuring a consistent approach for their lender clients,” Paraskeva explained. “This brings much needed confidence to buyers, sellers, and the market as a whole.”
