Thousands of homeowners stuck in properties with cladding finally might be able to sell or remortgage their homes after banks agreed to start lending on affected low and medium-rise flats from January.

Barclays Bank, HSBC, Lloyds Banking Group, Nationwide Building Society, NatWest and Santander have all confirmed that following the introduction of new guidance on cladding from the Royal Institution of Chartered Surveyors (RICs), from Monday 9 January 2023 they will be able to consider mortgage applications on properties in buildings in England of 11m and over in height.

Lenders have previously steered away from offering mortgages on properties with cladding due to a lack of clarity on how these homes should be valued. Now that the new guidance, which covers funding to remove or improve cladding on these properties, has been published, they should be able to resume lending.

Minister for local government and building safety Lee Rowley said: “I am pleased that from next month, lenders will consider mortgage applications in buildings over 11 metres with cladding in England that may previously have been refused.

“This is possible because of the protections for leaseholders in the Building Safety Act, and our commitment to getting buildings fixed, whether through our own remediation schemes or as a result of the pledge from developers.

“Lenders have confirmed that this will help to get the property market moving again by helping buyers and innocent leaseholders, who have been stuck for too long, to sell their homes.”

Will I still need an EWS1 form to sell or remortgage?

EWS stands for External Wall System. The EWS1 form was introduced by RICS in December 2019, following the tragic Grenfell Tower disaster. It is used as a way of confirming to lenders whether cladding remediation work would be needed and to help during their appraisal process for loan requests on affected buildings over 18 metres high.

However, many homeowners have found it impossible to get hold of the forms, as there are currently fewer than 100 registered fire safety engineers available to investigate a building’s external wall system and issue EWS1 forms. You can find out more about the form, including answers to frequently asked questions, on the RICS website.

Lloyds Banking Group on 21 December confirmed that it would no longer require an EWS1 form for properties that are five stories or higher, which should make it much easier for homeowners to sell or remortgage.

Jas Singh, chief executive of consumer lending at Lloyds Banking Group, said: “We have worked closely with housebuilders and RICS to find a solution for homeowners, so we warmly welcome the updated guidance for valuers on homes with external cladding.

“While we have continued to lend on properties with cladding where possible, this move will really simplify things for those buying homes in properties five storeys or above (11m).

“We hope this will continue to open up the market for those in affected properties, bringing peace of mind to homeowners.”

However, homeowners will still need to prove that any dangerous materials will be removed. A statement, from RICs and lenders, said “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.”

“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.”

Where to go for more help

If the property you want to buy, sell or remortgage is affected by cladding, it’s worth seeking professional advice on the options available to you. Hopefully the new guidance should make it easier to get a mortgage, but there are various other reasons your application might be rejected, which you can read about in our article 10 reasons you might not be able to get a mortgage on a property.

Speaking to an experienced mortgage advisor can help you to understand your options and get a great deal on your mortgage. If you’re looking for somewhere to start, you can speak to a Rest Less Mortgages advisor and get high quality advice on residential, retirement interest-only, equity release and buy-to-let mortgages.

Bear in mind that if your circumstances are complex or you’re worried about being accepted for a mortgage, it may be worth speaking to a specialist mortgage broker.

These can come with an additional fee, but may be more suited to borrowers that might require a tailored approach. If you’ve already had your mortgage application refused, our article What to do if your mortgage application is declined explores some of the steps you may be able to take next.