Remortgaging, staircasing or selling your home if you live in an apartment block

Since mid-2019 mortgage lenders have been asking people seeking to buy, staircase or remortgage properties in some apartment blocks for independent certification that the building meets new government safety guidelines.

Unfortunately, this means that in some cases it may not be possible for leaseholders to remortgage, staircase or sell their homes.

L&Q would like to apologise to residents who have been affected by this issue. We understand how upsetting and frustrating this is.

Below is some information which explains why this is happening, what L&Q is doing, and what help you are entitled to. 

What is happening?

Following the tragic fire at Grenfell Tower in 2017, the government changed its building safety guidelines by issuing a series of advice notes.

These advice notes were intended to give building owners clear guidance about how to make sure their properties are constructed and maintained safely.

In 2019, mortgage lenders and valuers began asking people who applied for mortgages on properties in some apartment blocks to provide independent certification that the building met the requirements of Advice Note 14.

This advice note stated that all materials used in the construction of the external walls of high-rise buildings should be of limited combustibility (or have passed certain safety tests) and have been installed and maintained correctly.

These requirements were not in place when the blocks were built.

In most cases, to prove that a building meets the new requirements, building owners must now go back and undertake complex intrusive inspections (which involve opening up multiple walls to check the materials they are made of), carry out safety tests, and in many cases complete remedial works.

Only then can they obtain the certification that mortgage lenders are asking for.

A new form, called an EWS1, was introduced in December 2019 to try and help building owners provide the certification more easily. However, in most cases this still requires the same process outlined above.

Unfortunately, in the short-term at least, this means that many building owners, including L&Q, can’t provide the certification that mortgage lenders are asking for.

In January the government consolidated its Advice Notes into a single document. This did not fundamentally change most aspects of the previous guidance; however it did say that it should now apply to apartment blocks of any height.

What is L&Q doing?

L&Q is an early adopter of the government’s building safety proposals and is committed to implementing the recommendations from Dame Judith Hackitt’s review of building safety.

The safety of our residents is our utmost priority.

L&Q owns a large number of buildings affected by the new guidance. We have completed our programme to remove ACM cladding (the type used on Grenfell Tower) from all our high-rise buildings.

We are also undertaking inspections and carrying out remedial works to several buildings where we have identified issues with safety since the new guidance was issued.

Unfortunately, as we own so many buildings affected by the guidance, we're not able to inspect, test, and then carry out works on them all at once. Instead we must prioritise our buildings based on risk. Our highest risk buildings, defined by height, occupancy and building materials, among other factors, will be inspected first.

We are currently in the process of assessing all of our buildings and prioritising them for inspection. We will be able to share timescales for the inspections of buildings that are 18 metres or higher with our residents in September 2020. We expect to complete this exercise for our remaining buildings by April 2021, and will be able to inform residents about the timescales for an inspection of their building at this time.In the meantime, we’re continuing to progress works on buildings where we have already identified issues.

Given the extent of the new guidance, the likelihood of most buildings requiring some degree of remedial work is high, and so we anticipate that our programme of inspections, testing and remedial works will take several years to deliver.

The government realises that this is the case for many building owners like L&Q, so along with our colleagues in the sector, including the National Housing Federation and the G15 (a group of the largest housing associations in London), we are calling on them to reassure residents that they will not need to foot the bill for expensive works, give building owners a reasonable timeframe in which to resolve any outstanding issues, and work with mortgage lenders, valuers and insurers to collaborate and find a solution to enable the market to function.

In the meantime, we would like to apologise to those residents who will need to wait for their building to be inspected – we know how difficult this situation is for you.

We are continuing to offer various types of support to residents who may find themselves unable to staircase, remortgage or sell their home (see below).

Does this mean that affected apartment blocks are unsafe?

It does not automatically mean that a building is unsafe if the owner cannot provide the certification being requested by a mortgage lender, and it is not yet a legal requirement for a building to meet the conditions of the new building safety guidance.

However, lenders may still take the view that if independent certification cannot be provided to demonstrate compliance, they won’t offer a mortgage.

We would like to reassure our residents that all of L&Q’s purpose-built apartment blocks:

  • received Building Control sign-off at the time of build
  • received approval from a licensed warranty provider after they were built
  • have an up-to-date fire risk assessment – we review these each year for our high-rise blocks (18 metres or above) and any recommendations are dealt with immediately or put into a programme of work to be completed as soon as possible

What will you do if I can’t sell/staircase/remortgage my property?

We want to do everything we can to support leaseholders whose mortgage application or sales process has been disrupted as a result of the approach that lenders are taking.

Some homeowners paid money to us to cover administration or application fees while trying to sell, staircase or remortgage their home. We’ve already issued refunds for these fees to the homeowners we know have been refused a mortgage as a result of the new guidance.

In addition to this, if you began a sales or remortgaging process which was stopped from progressing by your or your buyer’s lender, we will waive our administration fees should you wish to begin this process again once the necessary certification has been obtained (please note that this offer does not include the resale nomination fee, which we are obliged to charge as a condition of the lease, however it does include valuation and landlord’s enquiry pack fees). We will honour this for up to two years after certification is obtained.

If you believe you’re entitled to a refund and haven’t received one, please contact our Homeownership team by calling 0300 456 9998.

We are advising any residents who would like to remortgage, staircase or sell their home to seek advice directly from their lender or mortgage broker before beginning this process.

Finally, we have amended our sub-letting policy to allow this in properties where it has not been possible for residents to sell.

For more information about this please contact our Homeownership team by calling 0300 456 9998.

Once again, we would like to apologise for any stress or upset that this situation is causing.

We would like to reassure you that your safety is our number one priority, and that we and our sector partners will be working closely with the government to try and find a way forward which supports affected residents.

If you have questions regarding the safety of your building, please contact us.

You can also read our statement about how we’re continuing to deliver essential fire safety works during the coronavirus outbreak.