Cladding Crisis Stops Flat Owners From Selling or Remortgaging

Ever since the Grenfell Tower fire in 2017, concerns about cladding have continued to spread across the country, turning into a national crisis. It’s also deeply affecting flat owners living in blocks covered in cladding. As these homeowners are looking to sell their property, but can’t as lenders refuse to provide finance on homes made of combustible material. 

Owners aren’t able to do anything until the buildings are proved to be safe. As a result, those looking to sell and move on are essentially trapped. Plus, they’re potentially unable to remortgage, which leaves many stuck with rising monthly bills.

Thousands affected

As many as 450 buildings are said to be covered in the most combustible material, at least according to figures from the Ministry of Housing Communities and Local Government. This means that thousands of flat owners have potentially been affected by the ongoing crisis, with most only becoming aware of the problem when they try to sell-up or remortgage onto a cheaper deal.

Until the issue is fixed, blocks currently covered in a non-fire retardant form of cladding have seemingly become unmortgageable. Unfortunately, some developers and freeholders are reluctant to resolve the issue, due to the potentially high cost of replacing it with more attractive fire retardant cladding. They may simply take the cheapest alternative cladding they can, which will then devalue the property. 

Steps flat owners can take

Those flat owners who are looking to sell or remortgage can ask the management company of the building to get an accredited professional to test for combustible material. It could very well be the case that the cladding on the building is actually fire retardant. 

If the cladding tested is non-fire retardant, flat owners will need to look into exactly what work needs to be done. A schedule and time frame of work can then be put in place, which owners can request a copy of. In some cases this may then be sufficient for certain lenders to provide finance. The majority of lenders though, will require a fire safety report, which will only be issued once the building is safe.

The developers who originally signed off on the substances put behind the cladding may no longer be in business, as this could have been done over 20 years ago. If this is the case, the freeholder and management company need to take responsibility, and flat owners need to get together to ensure urgent action is taken. Even if it’s for no other reason than to make sure they live in a safe property. 

When it comes to remortgaging your home, our experts at Taylormade can guide you through the whole process, searching the mortgage market to find the best deal for your individual circumstances.