Crowd-sourcing lender attitudes to mortgages on leasehold properties with building safety issues
Quicklinks: Barclays / Nationwide / The Mortgage Works / Halifax / HSBC / Lloyds / Natwest / Birmingham Midshires / Santander / Skipton / TSB / Other
The building safety scandal has blighted the lives of tens of thousands of people’s lives in the UK over the last few years, particularly since 2019 when the Royal Institute of Chartered Surveyors (RICS) introduced the controversial EWS1 form.
The mortgage lending criteria of banks and building societies on affected properties is very unclear and seems to change regularly, making it hard for owners of leasehold properties to understand whether they are able to re-mortgage or sell their properties.
This website (created by me, James, a fellow leaseholder currently stuck in this mess!) attempts to shine a light on these criteria by crowd-sourcing case studies of successful and unsuccesful mortgage applications.
The content may also be used in meetings between the EOCS team and the Department for Levelling Up, Housing and Communities as examples of lenders not fulfilling their pledges and promises. Please help populate it with your own story! You can contribute by completing this form (and giving as little or as much information as you like):
- Submission form
You can find out more about the wider situation via the End Our Cladding Scandal campaign website and their Twitter account.
Background: Statement from lenders on 20 December 2022:
“[…] From Monday 9 January 2023, Lenders will be able to consider mortgage applications on properties in buildings in England of 11m and over in height.
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. (All mortgage lending is subject to regulatory requirements and individual firms’ lending policies).”
Lenders supporting this statement as at 20 December 2022 are:
Barclays Bank, HSBC, Lloyds Banking Group, Nationwide Building Society, NatWest, Santander
RICS, the Building Societies Association, and UK Finance also support this statement.
(*) Recognised remediation schemes in England are:
Source: UK Finance
Below you will now find case-studies grouped by lender.
Barclays
- A leaseholder who wished to remain anonymous provided us with this information (in March 2023) from Barclays setting out their lending criteria in the most detail we’ve seen before.
- Sam talked to Barclays in March 2023, his building is over 18m, his Housing Association (freeholder) is Notting Hill Genesis, and he tried to re-mortgage with Barclays. Countywide Surveyors gave a £0 valuation until EWS1 is available. He’s currently appealing on the grounds that all work has begun and is paid for by Notting Hill Genesis and the work is due to finish in July 2023.
- Adam talked to Barclays in mid August 2022 and they said they haven’t updated/changed any policies lately. They need remedial works completing and then a new EWS1 doing before they will consider lending. However Barclays did allow Adam to change to a buy-to-let mortgage, on the basis of no additional borrowing / equity release and having to pay various extra fees. His building is covered by a developer pledge, although Barclays have never asked for proof of this. Work has not started on his building.
- Jana called Barclays on 16 February 2023 and was informed for her building (under 11m) that Barclays would need an EWS1 form.
- A couple sought to remortgage (new product) a flat covered by a developer pledge with Barclays in Feb 2023. Despite producing the developer’s pledge letter stating necessary works would be covered, the application was declined and returned a zero valuation. The developer now states that their PAS 9980 rates the building at a B1, so no works are required, but this is being challenged by the building [freeholder?] based on a prior assessment, so no EWS1 has been issued. In the meantime, the applicants produced a copy of the Leaseholder Deed of Certificate to Barclays, but the bank continues to insist on the signed Landlord certificate also being issued, contrary to the UKF press release. The freeholder claims to have no responsibility for producing the Landlord Certificate, leaving the couple in a catch 22, unable to provide an EWS1, a letter stating the plan for the remedial works or a landlord certificate.
- Neera in Birmingham sent info in June 2023 saying that Barclays will not lend until the work is completed. “Option B2 means that an adequate standard of safety has not been achieved and remedial works are required to the block. This means the property will be unacceptable until all necessary remedial works have been satisfactorily completed and a new, acceptable EWS1 form is received together with confirmation that no costs will be passed on to the flat owners”. I have both a leaseholder and landlord certificate but they were not willing to engage further.
Nationwide
- In June 2023 a contributor provided us with this list of buildings Nationwide and The Mortgage Works have black-listed for mortgages
- On October 2022 David had confirmation from his freeholder that remediation will start in 14 months, and end 8 months later, and that he will not be liable for any costs. Nationwide however refused his buyer a mortgage.
- Jana called Nationwide on 16 February 2023 and was informed for her building (under 11m) that Nationwide would need an EWS1 form.
- I own a 1 bed flat in a 3 storey block (under 11m). I had sold my flat October 2022 but was blocked by nationwide requesting an EWS1. Housing association refusing to provide one as not a requirement. This led to me losing the sale. The 3rd floor has cladding on, which we believe from building reports to be Zinc seamed and non combustible. At the time of the survey there was a ‘simultaneous evacuation’ strategy in place which has been changed to ‘stay put’ due to improvement in compartmentation. Also the waking watch should be no longer required. I am stuck as to whether I should remarket for sale and risk more disappointment aa lenders are very unclear if the new FRA is acceptable.
- I listed my flat (built 2017) for sale in Feb 23 and received an offer within 3 weeks. But since then, our buyer has pulled out as they have been unable to obtain a mortgage from both Nationwide and Halifax as both have requested an EWS1. Our block is 3 stories high and we have written confirmation from Bellway (the developer) that no MCM, ACM or HPL materials were used and also detailing the materials used and that they are compliant. But this was not enough to satisfy both Nationwide or Halifax (funny enough, our mortgage is currently with Nationwide) and they have refused to lend. Our managing agent will also not carry one out as they believe the written confirmation from Bellway is sufficient and therefore an EWS1 is not required.
- In June 2023 Laura reported she was in an under 11m building with no identified fire safety issues, non-flammable cladding and insulation and FRA with no outstanding issues. Despite this nationwide refused to lend - they asked for EWS1 or FRAEW or similar level of information, which our housing association couldn’t provide.
The Mortgage Works
- In June 2023 a contributor provided us with this list of buildings Nationwide and The Mortgage Works have black-listed for mortgages
- As of March 2023 they are still insisting on an EWS1 forms, regardless of freeholder or leaseholder certificates and other documents.
- As of March 2023: Jess applied for a mortgage extension with mortgage works (Nationwide) last year and were refused as we had a failed EWS1 form. We needed the mortgage extension because works are not starting and we can’t sell and at the end of the mortgage term we will have to pay up or lose the flat. We had always intended to sell the property before term end but now we are stuck. We asked them again this year but they want to know when works will start and finish and a new EWS1 form. We cannot give them this as our freeholder is selling up and we have no clue if and when works will start. We so know an application has gone into the BSF but can’t progress until the managing agent supplies more info.
Halifax
- Lee (writing in March 2023) needed to move, but couldn’t sell, so did consent to let on his flat through Halifax. His fixed-rate mortgage has now come to an end but Halifax won’t agree a new fix while it’s on consent to let (but he also cannot sell it). Due to personal circumstances he can’t move back there. So it’s now on the ‘standard variable’ for the last two years.
- John has no EWS1 form, but building is being remediated by freeholder, expected completion summer 2024. As of March 2023 still asking for EWS1 forms though so cannot mortgage with them.
- I am currently with Halifax. Tried to remortgage but they wouldn’t convert to buy to let starting they don’t do that. B2 rating can’t take out a new mortgage either. So the only option they gave me was to extend the number of years I was borrowing for to make it affordable otherwise I couldn’t afford the mortgage as interest rates went from 1.7% to 5%
- I listed my flat (built 2017) for sale in Feb 23 and received an offer within 3 weeks. But since then, our buyer has pulled out as they have been unable to obtain a mortgage from both Nationwide and Halifax as both have requested an EWS1. Our block is 3 stories high and we have written confirmation from Bellway (the developer) that no MCM, ACM or HPL materials were used and also detailing the materials used and that they are compliant. But this was not enough to satisfy both Nationwide or Halifax (funny enough, our mortgage is currently with Nationwide) and they have refused to lend. Our managing agent will also not carry one out as they believe the written confirmation from Bellway is sufficient and therefore an EWS1 is not required.
- Writing in June 2023, Caroline told me how she sold her flat earlier this year. It ws a shared ownership (L&Q) property with a B2 rating. Managing agent Rendall and Rittner, developer Fairview. Buyer got a mortgage with Halifax around Jan/Feb, with just a letter of assurance stating that the developer would be starting the work this year (no date) at no cost to leaseholders. Sale completed.
- Sarah writing in August 2023 - “Have have my flat on the market since end of March, accepted an offer in May. Buyer pulled out over the weekend. We are under 11m with a EWS1 survey showing remedial work required but building low risk. Buyer was unable to secure a mortgage offer on the building. She tried 2 major lenders with same outcome. The first lender Nationwide came out to conduct a valuation survey, they asked me to provide them with a copy of the EWS1 Survey which we did. They then requested a letter from responsible person confirming that freeholder would cover the cost of any remedial works to the building or assurances regarding the external walls. I was provided me with an email from freeholder/developer detailing that our block would be considered in their EWS inspection programme, although as it was low rise it was anticipated that no works would be required. Nationwide then went on to request our latest FRA which I provided, they told me that they would not be able to accept the FRA document as it had been carried out by a subsidiary company of the management company they then asked if we had FRAEW survey, management company tells me we haven’t had one carried out. Despite this being a recommendation in the FRA of May 2023. I then got some legal advice about what lenders can request of leaseholders from the leaseholder advisory service they explained to me that FRAEW is slightly different to a EWS1 survey and considers different things and helps to determine the overall risk factor in a building to help a lender make a commercial decision on whether to lend. My buyer then cut her losses with Nationwide after 3 months of persevering trying to provide reassurances to them with regards to the building. She tried a second lender who again came out to conduct a valuation survey only to be told flatly “we do not lend on this type of building” and so now she has pulled out of the sale”
- Basim writing in October 2023 - “Apartment in an 18m+ block. PAS9980/EWS survey states remedial works required to balconies (B2 rating). No remedial works yet taken place. Buyer was able to secure a mortgage with Halifax and complete in October 2023. A ‘letter of comfort’ from the original builder was provided to the lender which stated that they would be covering the cost of works which the lender accepted.”
HSBC
- Lilli spoke to HSBC in late August 2022, and they confirmed their policy still focuses on EWS1 forms. The advisor said that a (passing) EWS1 is required for flats with building safety defects.
- Anonymous managed to successfully remortgage from santander to HSBC in April 2023. The HSBC surveyor valued property as ‘current £0 potential £TBC’. We are an orphan building with b2 rating. I had to provide 2 bits of information after survey rating. 1) leaseholder government certificate thingy and title deeds. 2) a letter headed statement in writing from my management company stating the answers to 3x questions. A) do you have a start date. Answer, we did, but its been delayed due to contract negotiation between them and BSF. B) have you secured BSF funding. Answer, almost. Still negotiating on contract. C) what is the financial loyally of remediation work for this leaseholder. Answer £0, all covered by BSF. The whole thing took a lot longer than normal. 2 months start to finish. My full commercial property value was used in the mortgage paperwork.
- In June 2023, Rebecca told me she has a B2 rated flat, and remortgaged with HSBC in April this year. They requested an EWS1 and leaseholder certificate for valuation to prove I was had a qualifying lease. Surveyor then requested proof of remediation would happen from developer, which Barratts provided for my development. With this, surveyor was able to give a valuation and then it went to offer.
- Writing in August 2023, Jamie’s flat has a B2 EWS1 rating in a tower block over 18m. The developer (Barratt) has confirmed that it will carry out a new assessment under PAS 9980 and cover all costs of remediation. Leaseholders will have zero liability. I attempted to switch lender onto a BTL mortgage with HSBC (we are accidental landlords). I passed all borrower/affordability checks, but was rejected “due to the valuation”. I actually believe the surveyor would have approved the valuation, but it is HSBC’s policy that they will not grant BTL mortgages on flats with cladding issues (even on those where the leaseholder has zero liability). HSBC’s decision/policy is both baffling and crushing, and means we are stuck with Nationwide on a residential tracker mortgage paying an additional 1% interest to let the property on top of the normal rate.
Lloyds
- Lilli talked to Lloyds about the position in late August 2022, they said that they will lending in the following situations: 1. Proof of agreed funding from one of the government schemes (i.e. Building Safety Fund) alongside start and end dates for the work 2. Confirmation from the original developer of the building that they are completing the required remediation . Lilli interprets this as they will lend if you have proof of funding and proof that works are planned.
- Anecdotally there are reports from a broker that flats between 11-18m are not being requested for EWS1 forms now.
- John has no EWS1 form, but building is being remediated by freeholder, expected completion summer 2024. As of March 2023 Lloyds do not seem to be requesting an EWS1 form anymore, but rates for flats are very high, so not an option.
Natwest
- Lilli wrote to Natwest in August 2022, and they didn’t confirm anything either way. They said “The bank has no contractual relationship with yourself and no responsibility for any material loss you may or may not suffer – be it financial or trouble & strife. I am aware there is a situation in the UK affecting the cladding on possibly thousands of blocks of flats meaning, many people are not in a position to sell their flats and the bank is no way responsible for the blight on their properties.”. How nice.
- I tried to get a new buy to let mortgage from NatWest in October 2022. Provided them with the EWS1 rating which was B2. Also provided them with proof that building has got confirmation regarding funding and with start and end date. They still refused to give a mortgage stating they don’t provide mortgages to buildings with a B2 rating.
- In May 2023 Matthew accepted a bid on his flat, and the purchaser is trying to get a mortgage with Natwest. After valuation Natwest requested an EWS1 form which his freeholder will not provide. The freeholder provided a fire survey but not the PAS 9980. I have complained to Natwest and requested my freeholder to provide Natwest with the PAS 9980 form. I am still waiting for a response from Natwest/Irwell Valley (freeholder).
Birmingham Midshires
- In June 2023, Donna told me about the buy to let mortgage on her flat she rents out in Reading, Berkshire. The fixed rate is up on July 30th 2023 and my mortgage payments will more than double which will push me into more debt. I’m already in debt with huge service charges which quadrupled last year due to having to pay for waking watch offices, pay for tenders to do the building work and building insurance, which also quadrupled. My building is B2 rated therefore I cannot shop around for another mortgage and have to stay with Birmingham Midshires and accept their rate. Their SVR is 8.9%. I’m currently on 2.2%.. I’ve tried to sell to a cash buyer to walk away and that hasn’t been successful so far. I am at breaking point with stress, insomnia, panic attacks and anxiety, and also recently lost my mother and suffering huge grief. I also suffer with chronic illness. Our managing agent is rubbish & failed to submit paperwork which has held up the cladding work for a long time. They also do not know who the head leaseholder is. Therefore we do not have a certificate & the building needs remediation internally. This is causing problems and holding the work up even further.. the whole thing is a shambles. I had to submit the EWS1 form to Birmingham Midshires
Santander
- John has no EWS1 form, but building is being remediated by freeholder, expected completion summer 2024. As of March 2023 do not seem to be requesting EWS1 forms anymore, but have tightened lending rules for flats so more equity required.
- Applied to remortgage in Cardiff with Santander in February 2023. Cladding remission 2/3 complete all covered by Bellway and developer pledge signed. Santander underwriter asked for 4 cladding questions on letterhead paper (cost me £120 and took 3 weeks and 16 emails). Legal officer at Ringley (managing agent) had no idea and was answering incorrectly which in turn would have resulted in the mortgage being denied immediately by Santander. I had to write to the Bellway CEO who responded with correct answers about cladding and Bellway commitment. The Santander nderwriter did then agree to the mortgage, but after nine days no offer had been issued. Santander said it was now with ‘the valuers. Valuer asked if the assessments made were in line with PAS9980. We don’t know, so have gone back to Belway to ask. However the assessment was done in January 2022 and work started in 2021 so perhaps not?
- March 2023: Under 11m building with ACM cladding in East London. B2 rating EWS1. My current mortgage is with Santander, I have been unable to re-mortgage to any other lender due to the B2 rating, my mortgage broker said there was no point even trying.
Skipton
- In mid 2022 Joynul told me about how his 5-year fixed rate came to an end with Santander in 2020, and he tried to re-mortgage with Skipton, but they refused due to him not having an EWS1 form. He’s been on a standard-variable-rate with Santander since. His management company, Tower Hamlets Homes, have said they will do the EWS1 form in early 2023.
TSB
- Rob tried TSB (via a broker) in August 2022. The building has EWS1 B2 rating, however, the Managing Agent refuses to respond to lender’s questions. Explained this situation. After a valuation, credit checks, solicitors being instructed, and months of back-and-forth, TSB asked several times for the EWS1/questions to the Managing Agent which I’d already said I cannot provide. Asked if they would be prepared to lend with a Deed of Certificate. TSB insisted on receiving the signed and executed deed of certificate. (Rather than simply reviewing the unsigned deed on the Government’s website and making a decision based on that.) After another few weeks wait, TSB declined with no explanation given, despite receiving the completed deed of certificate.
Other
- My building (In Peterborough) doesn’t need an EWS/1 form according to RICS. I tried to sell my flat two years ago, but it kept falling through due to demands for the EWS1 form and the management company refusing to provide it. We also don’t have a fire certificate signed off because it doesn’t fall within regulations needed for that either. I tried to change to buy to let with my current mortgage provider, who is Barclays, they refused due to it being a new product and I would need an EWS1. I am now in a standard variable rate and have been for a year. Santander is the only lender that will land on this estate, we now have a problem with our ground rent coming up for renewal. And I’m now had to pay a deed of variation for nearly £4000 for this, and then my buyers mortgage fell through again. It’s now been 2 1/2 years and I’m stuck. I am the ground floor of a five floor block. But we have underground parking which makes us then six floors, we are under 18 m, but we do have balconies on top of each other. First Port are our management company and seem unwilling or unable to help. things are complicated beause Technically the estate isn’t complete, so we do not have certificates and also have problems with things having to be signed by the developers as well. Although they stopped building here years ago, the estate isn’t complete because there are too many issues with the council and the road.
- Cannot sell the flat due to remedial works following the EWS1 report so I had to rent it out. My mortgage broker spoke to Accord bank and although we got the government funding approved, they still refused to grant a buy to let mortgage until the works are completed. The contractor has been appointed, adequate insurance agreed upon, I assume a thorough review of the project done by the government and still that doesn’t seem enough for mortgage lenders. Risking to get an exorbitant flexible interest rate on top of huge service charge which cannot be disputed.
- In June 2023, Lynne told me about her flat in London E14, with numerous issues, cladding issues although not the ACM cladding as in Grendel, our balconies were non compliant as they were wooden, the management company had previously sued the builders Western homes over this when first built, balconies were apparently all replaced but still non compliant, I believe there were also firebreak issues. I managed to sell my flat in 2020 to a cash buyer but I estimated that I lost over £90k. I had a buyer at 670k but due to no EWS1, he couldn’t get a mortgage, with HSBC, Barclays or Santander. I ended up selling to a cash buyer at £580k. I bought the property in 2015, for 640k, had 2 new en-suite bathrooms, new kitchen, new flooring etc put in so I lost a lot more really. The good news is I did sell though and am free from the stress this housing nightmare brings especially as the building hasn’t even begun work to rectify the issues Whilst I am not happy about the loss I am happy to be out.
- September 2023, Meena wrote “Mortgage works refused to extend our mortgage. Our building over 18 m and no works have been started and no dates. The freeholder has been forced by a Tribunal to carry out works but nothing happening. We have a failed EWS1 and until Mortgage Works have info on works starting and finishing they refuse to extend. We can’t sell either to pay off the mortgage which was our intention. We are also non qualifying which is carried with the flat.