Inside Housing – News – EWS1 crisis: Banks agree to lend on some properties for which a sanitation plan is agreed

Some of the nation’s biggest banks could start lending on properties covered in hazardous materials as long as a fully funded remediation plan is in place, leading industry trade bodies have revealed.

Photo: Hrian Perera

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Some of the country’s biggest banks have agreed to lend on properties covered in hazardous materials as long as a fully funded remediation plan is in place, leading industry trade bodies have revealed #UKhousing

In an update today, UK Finance and the Building Societies Association (BSA) said several lenders have agreed to a new lending stance which states they will ‘take the necessary steps’ to facilitate lending on a property if a hazardous materials replacement plan had been established.

This is a drastic change from the old risk aversion approach of banks, which stated that no property would be loaned out until a full remediation was carried out to remove hazardous materials. .

The new guidelines state that banks could now lend on blocks that have been given a B2 or A3 rating if a “costed and funded remediation plan is agreed with commitment dates for the start and completion of all specified works/ required”.

A B2 rating indicates that combustible materials are present in the exterior wall of a building and must be removed.

A3 is usually given where attachments to exterior walls, such as balconies, are present and need to be removed.

The signatory banks of this agreement are: Barclays, HSBC, Lloyds, Nationwide, NatWest and Santander.

UK Finance and the BSA said they were currently working on a phase two plan to secure more signatures in the coming weeks.

The memo also says today that UK Finance, the BSA, the Royal Institution of Chartered Surveyors (RICS) and the government are working to establish a framework to allow verification of these key requirements, to provide transparency for tenants and potential buyers.

This move is a major step forward for tenants. Hundreds of thousands of people have been trapped for more than two years since the External Wall System 1 (EWS1) process was introduced after it was created by RICS. The majority of buildings that received EWS1 ratings received B2 or A3 ratings.

Despite calls from the government for banks to stop requiring EWS1 checks on buildings under 18 meters tall over the past 18 months, banks have largely ignored these guidelines, with the majority of tenants in these buildings trapped up to until their block receives a good health. on an EWS1 form.

In today’s update, UK Finance and the BSA have also committed to a closer look at lending and valuation of properties rated A3 or B2 once the Building Safety Bill will enshrine protections for tenants.

He said that review would also look at the new “remedial order” regime that is expected to be introduced as part of the bill.

The new chart released today confirms that lenders will lend on any building with an A1, A2 or B1 rating, or an EWS1 or equivalent form that shows no rehabilitation is needed.

Inside the housing has already spoken to tenants who have had problems obtaining mortgages on buildings that have been rated B1 in the past.

RICS also backed the banks’ statement, which will ensure assessments take into account full costs and remediation plans. He said EWS1 assessments are done in accordance with PAS 9980.

Last month, RICS revealed that it would now expect all EWS1 assessments to follow the new PAS guidelines, a 178-page document aimed at giving assessors a framework to follow when assessing the risk posed by a wall. outside in a building.

The government has previously said it hopes PAS 9980 will bring proportionality back into the assessment of mid-rise buildings and significantly reduce the number of unnecessary surveys required.

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