Remortgaging, staircasing or selling your home if you live in a purpose-built block

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

In recent months, mortgage lenders and valuers have begun asking people who apply for mortgages on properties in purpose-built blocks to provide independent certification that the property meets the requirements of Advice Note 14. Unfortunately, in the short-term at least, building owners can’t provide this certification.

This does not mean that affected buildings are unsafe. It is not a legal requirement for a building to meet the conditions of Advice Note 14. However, lenders may still take the view that if independent certification cannot be provided to demonstrate compliance, they won’t offer a mortgage.

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

This is a nationwide issue which is now affecting thousands of leaseholders. We know this includes L&Q leaseholders, and we’re sorry for any upset and frustration that this is causing.

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.

Along with our colleagues at the G15, a group of the largest housing associations in London, we will be calling on the new government to step in. We will ask them to offer clear guidance for building owners and mortgage lenders on the proportionate implementation of their building safety advice notes.

L&Q is an early adopter of the government’s building safety proposals and has committed £250 million to implementing the recommendations from Dame Judith Hackitt’s review of building safety. The safety of our residents is our utmost priority.

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

  • received Building Control sign-off at the time of build
  • received approval from a licensed warranty provider after it was 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

We hope that we will get the clarification that we need from the new government in the coming months. Our hope is that this will reassure residents, allow mortgage lenders to relax their stance, and give building owners a reasonable timeframe in which to resolve any outstanding issues.

Some homeowners paid money to us to cover administration or application fees while trying to sell or remortgage their home. We’ve already issued refunds for these fees to the homeowners we know have been refused a mortgage in relation to Advice Note 14.

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

New valuation process in response to government advice notes

The Royal Institute of Chartered Surveyors, UK Finance and the Building Societies Association have agreed a new process to try and help homeowners who are experiencing difficulty with getting their home valued. This new process is designed to try and help people in tall buildings to sell or remortgage their home.

Unfortunately, the new process still requires professional fire safety experts to assess the materials used on the external walls of buildings. This is to make sure the walls meet the new standards set out in Advice Note 14. In most cases, this is likely to require an intrusive survey to be carried out, which is no different to the approach required before. 

What’s more, as part of this process, and given the extent of the new guidance, it is highly likely that the expert will recommend that remedial work be carried out. For owners of multiple buildings, such as L&Q, this work will take several years to deliver. 

It is also likely to be complicated by an industry-wide shortage of appropriately qualified fire experts available to assess buildings, carry out inspections, and confirm whether remediation work is required. 

Only after all this has been done will the expert be able to provide lenders with assurances about whether a building is safe. They’ll do this by issuing a safety certificate, which would be valid for five years. The properties can then be valued.

The new valuation process is, therefore, not a solution that will help everyone. Unfortunately, it means residents will still find it difficult to staircase, sell or remortgage their home.

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

If you are concerned that your ability to remortgage, staircase or sell your home might be affected by these changes, please seek advice directly from your lender or mortgage broker.