Red tape nightmare that stops millions selling their homes: Lenders demand proof buildings do not pose fire risk
- Flats owners say they can’t remortgage or sell in wake of the Grenfell Tower fire
- Concerns over cladding mean lenders want paperwork to prove building is safe
- Fears up to three million people living in private flats could be unable to move
Thousands of people living in flats say they can’t remortgage or sell their homes due to new safety advice issued in response to the Grenfell Tower fire.
Concerns over cladding mean that lenders will not offer a new mortgage on some apartment block homes without paperwork to prove the building is safe.
There are fears that up to three million people living in private flats in England could be unable to move as a result.
Workers remove cladding from a London tower block in the wake of the Grenfell tragedy. Some lenders will not offer mortgage on some apartment block homes without paperwork
It comes after a housing minister said lenders had been misusing a process designed to approve blocks as safe.
Fire safety guidance on external walls used to apply only to blocks taller than 60ft, which usually means six storeys.
But in January, the guidance by lenders and the Royal Institution of Chartered Surveyors was extended to buildings of all heights with any cladding, not just the type that caused the Grenfell fire in 2017. And blocks with no cladding are also caught by the rules.
It means the number of flats requiring the issue of an EWS1 form has grown from 307,000 to three million.
The rules have left Rachael, 38, and John Duncan, 35, trapped in a one-bedroom flat in Islington, North London, with their 14-month-old baby. They bought a 50 pc share of the £470,000 flat in 2017.
The couple had found their ideal family home in Faversham, Kent, after putting their flat on the market in February. They had agreed a June completion date with their buyer.
But in mid-May the sale collapsed when they were told by their solicitor that the buyer’s lender was requesting an EWS1 form, which they did not have.
Our family is trapped in a tiny flat
A London firefighter, his partner and one-year-old daughter have been unable to move to their dream home because they cannot get documents to show that the flat they were selling is not a fire risk.
And with no idea of when they might be able to move, it also means that James Gilham and Natalie Russell, both 28, have had to put on hold their plans to give baby Evelyn a brother or sister.
James and Natalie bought 50 per cent of their small apartment in Romford, Essex, in 2015, when it was valued at £210,000.
No paperwork: James Gilham and Natalie Russell, both 28, have had to put on hold their plans to give baby Evelyn a brother or sister
They had agreed to sell it for £300,000, but two weeks ago the deal collapsed when the buyers were told they needed documents to show the building was safe.
As a result, James and Natalie lost out on a three-bedroom house in Chelmsford which they were buying for £330,000.
James says their buyers have been told they must be supplied with an EWS1 form – a standardised certificate which shows lenders that the flat is not a fire risk.
Their apartment block has only four storeys, which meant it would not have required the form before January this year.
James says he only found out about the form when he was told their buyer had been unable to get a mortgage. ‘This is having a massive impact on our lives,’ he says.
Rachael, who works in publishing, says their housing association provided a full fire risk assessment demonstrating the apartment was low risk, but they were told only an EWS1 would do.
She says they are now at the back of the queue for the lengthy assessment to be carried out because their building is under 60ft and brick-built, so not deemed to be at risk.
She adds that this is not likely to be signed off until at least 2026. ‘Our situation is bleak,’ says Rachael. ‘We have a one-bed flat we cannot rent out as it’s against shared ownership rules.
‘With only two rooms, there’s not enough space for the things a toddler needs. My husband and I have been sleeping on a sofa bed in the kitchen/living room. We are in our late 30s and our plan was to have a bigger family, but that now looks impossible.’
Last month, Housing Minister Christopher Pincher admitted that lenders had been using the EWS1 forms more often than originally intended.
The forms were brought in last year to give lenders more confidence in providing mortgages on multi-storey buildings following the Grenfell Tower fire.
Valuers can request the forms from building owners to confirm they do not pose a fire risk. If they do pose some risk, an explanation of required repair work is needed.
Fire engulfs the 24 story Grenfell Tower in West London on June 14, 2017.
Nick Morrey, of mortgage broker John Charcol, says lenders are simply following official guidance, but there are ‘inherent problems’ in getting the forms due to the lack of specialist surveyors.
He says: ‘Is it creating mortgage prisoners? Yes, undoubtedly. However, all the properties need to be inspected.’
Mr Pincher admits there are fewer than 300 chartered fire engineers who can carry out an EWS1 survey — which means just one engineer for every 10,000 flats needing a survey.
Martin Boyd, of the Leasehold Knowledge Partnership, says he is aware of residents being told to wait ten years until their homes can be declared safe.
A government spokesman says: ‘The EWS1 process is designed to support valuations for high rises where cladding may be a concern — this is because of the increased risk fire can present at height.
‘While not all lenders require an EWS1 form, building owners should be as forthcoming as possible about the construction of their building and the fire safety measures in place.’