Overdue cladding inspections leading to ‘thousands’ of rejected mortgage applications
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Lenders are rejecting “thousands” of mortgage applications due to outstanding cladding inspections making borrowers “prisoners” to their current providers, a broker firm has claimed.
Chris Sykes, mortgage consultant at Private Finance, said the firm received notices from lenders including Barclays and Santander saying several mortgage applications were having to be cancelled because inspection requests made to management and maintenance companies of high rise properties were delayed.
He said he had seen some requests held for as long as nine months due to a lack of qualified inspectors, meaning mortgage applications were often exceeding the typical three-month timescale.
Sykes added that although testing may have been done on the buildings at some point, it was not always sufficient as many mainstream lenders require inspectors with certain qualifications and from particular trade bodies to carry out checks.
He also said clients were not receiving updates on the status of the inspections resulting in applications “grinding to a complete standstill”.
Sykes said: “We’re only given a certain amount of information and we can only chase so much. It seems those reports never come through, so we have to look at alternate routes.”
This has resulted in Sykes going to another lender to get another valuation, as he found some valuers were less concerned about particular cladding materials being used and did not consider them to be a risk to lend on.
He added:“Other times it’ll be somebody looking to remortgage, and they’ll just have to stick them with their current lender and find them the best rate there or they end up on the current lender’s standard variable rate.
“If someone is trying to sell a property and nobody can buy it because of cladding reports, then it’s throwing a spanner in the works.”
EWS1 certificate
A spokesperson for Barclays said the matter related to “those qualified to issue the EWS1 certificate, the number of buildings that need to be inspected and the time needed to complete this review”.
It added: “For existing Barclays Mortgages customers that have not yet been able to obtain the EWS1 certificate, we will allow them to complete a swap rate to any of our highly competitive loyalty products – or complete a product transfer. For those seeking to remortgage in order to borrow additional funds, until EWS1 certificate is available we will not provide further borrowing.”
Barclays has been instrumental in developing a document with The Royal Institution of Chartered Surveyors (RICS), The Building Societies Association (BSA), and UK Finance to address those who are unable to remortgage due to cladding issues.
The initiative was introduced in December and will be a single assessment for each building which will be valid for five years.
Santander has been approached for comment by Mortgage Solutions.