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Cladding crisis: six major lenders now offer mortgages on some affected buildings – but not everyone can get them

Re-cladding work in progress on a block of flats Ruby Court in Stratford, London

Flat-owners impacted by the cladding crisis in England may now be able to sell or remortgage their homes, with six major lenders agreeing to offer mortgages under new industry guidance. But the measures only cover properties in buildings of 11m and over and so not everyone affected will benefit – and we're yet to see how it will work in practice. Here's what we know so far.

See our Mortgages and Homes hub for general guides and tools to help you get the best deal on your mortgage.

Six major lenders have signed up to the scheme

The new lending follows guidance issued by the Royal Institution of Chartered Surveyors (RICS) this week, which will help valuers assess properties with cladding – enabling mortgage lending on those properties. The six lenders are:

  • Barclays
  • HSBC
  • Lloyds
  • Nationwide
  • NatWest
  • Santander

You'll need to provide specific evidence to get a mortgage offer

To get a mortgage with one of the six lenders, you'll need to provide evidence that at least one of the following applies:

  • Your building will be fixed by the developer (this is known as 'self-remediation');
  • You're covered by one of the recognised Government schemes – the Developer Remediation Contracts, the Medium Rise Scheme or the Building Safety Fund; or
  • You're covered by the leaseholder protections in the Building Safety Act. You can check if you qualify for these protections using the Government's online tool.

You may also continue to need an 'EWS1' form, which is a type of safety certificate introduced after the Grenfell disaster, which many mortgage lenders require in order to lend on flats in affected buildings – see the RICS website for more on how the EWS1 process works and when the form is needed.

As the evidence required varies by lender, it's best to speak with them directly to check what evidence they'll need before you apply - we've more on this in the table below. 

Unfortunately this means that if there is no remediation plan in place for your building and you aren't covered by one of the existing Government schemes, you might still struggle to get a mortgage.

You should get the same interest rates and mortgage terms as anyone else

Other than the extra evidence you need to provide, applying for these mortgages should be very similar to applying for any other mortgage – see our Mortgages section for general help and tips on getting a mortgage.

In addition, all six lenders – Barclays, HSBC, Lloyds, Nationwide, NatWest and Santander – have confirmed to us that you'll get the same interest rates they offer to other borrowers. In other words, they won't charge extra just because your building is affected by cladding issues (though you may still pay more indirectly due to the limited choice of lender).

What each lender is doing

The six lenders that have agreed to consider offering mortgages on affected properties cover more than 60% of the mortgage market.

We asked each of them what changes they've made following the new RICS guidance taking effect and have rounded up their responses below - though we're asking all of them for more detailed information on the evidence they require and will update this story when we know more. 

We're checking if other, smaller providers will also start lending on affected properties and will update this when we know more.

Lender New policy
In all cases, you'll need to provide certain extra evidence as part of your application (for example, a leaseholder "deed of certificate" or landlord certificate) – see above for more on this.
Barclays Will now be able to lend on affected properties where a recognised remediation scheme is in place. 
HSBC Will now consider lending on flats which have failed their EWS1 assessment.
Lloyds No longer requires an EWS1 form to progress applications for properties in England that are in buildings five storeys or higher.
Nationwide Will now lend on affected properties, where the property is covered by the government or developer remediation schemes.
NatWest "Will support" more customers with a mortgage on a building with cladding - but only for properties rated A3 or B2 in their EWS1 assessment.
Santander Will now consider lending on flats in buildings irrespective of the building's height or whether remediation work has commenced. May still request an EWS1 form in some cases.

'A major step forward – but we're yet to see how effective the banks' new policies will be'

We spoke to three mortgage experts to see what the new guidance might mean for affected leaseholders. The consensus was that, while it's a positive step forward, it remains to be seen how well it will work in practice.

Mortgage broker Ray Boulger, of John Charcol, told us: "As these new rules only came into force on 9 January we don't yet have any practical experience of how effective they will be. However, it certainly appears to be a major step forward and so I think many borrowers will now have a realistic chance of obtaining a mortgage." 

David Hollingworth, of L&C Mortgages, added: "Having the ability to take a new mortgage on properties that would have previously found it impossible will have clear benefits and allow existing homeowners to shop around for a better deal."

Brian Murphy, head of lending at the Mortgage Advice Bureau, said: "It is important that more lenders agree to join and support the scheme in order that mortgage borrowers, both existing and new, have as much choice as possible in obtaining the right funding for their individual needs and circumstances."

Why cladding has caused problems for homeowners and lenders

The impact of unsafe cladding has been a major issue since the Grenfell Tower fire in 2017, which killed 72 people. Many of those living in similar buildings have been unable to sell their properties or remortgage, essentially leaving them trapped.

The Government has introduced a number of measures aimed at ensuring that the cost of removing cladding from unsafe buildings will not be the responsibility of flat-owners, including the Building Safety Act that guarantees most leasehold flat-owners living in blocks greater than 11 metres in height won't have to cover the cost of any cladding-related work.

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