Mortgages on flats - is the EWS1 situation as bad as some are saying?

firsttimesellerldn

Hi - I’m selling my one-bed flat in a purpose built block in London. It’s leasehold and I have a help to buy loan of 40% to repay. The block was completed in 2017 by a private developer, and there are conditions in the lease to ensure it remains more affordable than market rate and I can only sell to those who don’t own property - long term renting out isn’t allowed. 

I’ve accepted an offer from a first time buyer and their mortgage application is currently with their lender. Last week the management company (we have right to manage and they deal with it day to day) told me that the block didn’t have an EWS1 form and there was no scheduled inspection to obtain one. I’d never heard of an EWS1 form before but since then I’ve done lots of reading online and I’m seeing loads of accounts of people saying lenders are insisting on them for all purpose built blocks at the moment and that basically if you don’t have one your flat is probably unmortgageable. I’m really worried about this - we’ve had an offer accepted on a house and I can’t rent this place out even for the year allowed under the lease (prohibited under HTB loan). The thought of being stuck here is really scary. I understand the forms can be v expensive to obtain, you’d need buy in from other lease holders to pay the people qualified to fill them in are in v short supply. The developer says one isn’t needed as the block is under 18m, although I think it might actually be higher.  It’s clad in brick but I don’t know what insulation is under it. Developer says no materials used are ones identified as problematic, but I’m wondering if lenders will accept their say so or insist on EWS1.

Obviously I need to wait and see what my buyer’s lender says, but I’d be really interested to know if anyone has been able to complete a flat sale/purchase recently without an EWS1, or if anyone has any advice. Thank you! 

alsamps21

Hi there, 
I'm really sorry you've been caught up in this, and that the first you knew of it was at the point of trying to sell. The EWS1 scandal has been growing over the last year, and I'm afraid pretty much every property comprised of flats is caught up in this now. You are extremely unlikely to be able to sell, or even remortgage your property without an EWS1 form/survey having been carried out on your building. All neighbours in your building will also be affected. 

I've been waiting since last September to remortgage on my property, and am currently in limbo being unable to do that and therefore also unable to buy the other 50% share of our shared ownership. In the recent months I've been thinking I want to move away and I won't be able to do that either until this is all sorted. It is scary and stressful, and we are one of around 500,000 people across the country in this situation. It is only really gaining traction now in the media - I'd hope the government is under pressure to get things sorted, but I feel a bit hopeless with all else that is going on. Mortgage companies are unfortunately showing themselves to be caught up in fear mongering and completely inflexible on offering to lend even if the building is shown to be in fire safe cladding. They require the EWS1 form, and sadly there is such a backlog of buildings needing to be inspected and a lack of qualified people to do it the fear is this could take years. I'd check out the @claddingscandal group on Twitter to be looped into what action groups there are on this. While it's a very bleak situation, the implications are huge and on too many people - if we make a noise about it, the government will have to address it. 

firsttimesellerldn

Thank you so much for taking the time to respond - I find the whole situation utterly shocking and unbelievable, particularly the lack of government engagement on the issue. I’m really sorry to hear about your own situation too. 

I’ve been reading lots online so am definitely going to join some groups and make as much noise on this as I can. Given the sheer numbers and breadth of people involved it must surely put pressure on government and lenders soon. I’m also really annoyed that neither the developer (who are involved in the sales process) or our managing agent thought to mention this earlier. I’ve already spent hundreds on the process, and I’ve also got a buyer and a seller involved who it now sounds are likely to be let down as well. For now I will wait and see what comes back from my buyers lender and hope that somehow they don’t insist on an EWS1, but that sounds unlikely.. 

alsamps21

firsttimesellerldn said:

Thank you so much for taking the time to respond - I find the whole situation utterly shocking and unbelievable, particularly the lack of government engagement on the issue. I’m really sorry to hear about your own situation too. 

I’ve been reading lots online so am definitely going to join some groups and make as much noise on this as I can. Given the sheer numbers and breadth of people involved it must surely put pressure on government and lenders soon. I’m also really annoyed that neither the developer (who are involved in the sales process) or our managing agent thought to mention this earlier. I’ve already spent hundreds on the process, and I’ve also got a buyer and a seller involved who it now sounds are likely to be let down as well. For now I will wait and see what comes back from my buyers lender and hope that somehow they don’t insist on an EWS1, but that sounds unlikely.. 

It is a really shocking situation - and needs addressing ASAP! The implications are huge. But exactly why I think we will get some kind of support shortly in the coming months even if it is the government forcing mortgage lenders to be more flexible. Great that you're joining the groups and informing yourself, I think it helps talking to others and seeing what successes (if any) they are having in selling. Just remember you are not by yourself in this situation, only a small comfort I know but hopefully helps somewhat. I am truly sorry your managing agent didn't give a heads up before you went on spending in trying to sell- this has been a widely known issue the last few months at the very least!

annetheman

In short, unfortunately I can pretty much guarantee your buyer's lender will want an EWS1. It doesn't matter that there is no cladding, or that it is under 18m, all banks are asking for it since Advice Note 14 came out in January and are asking for it for any and every purpose built flat.

Your buyer may be lucky and their lender's valuer may say that an intrusive survey isn't required, then your freeholder is looking at a cost of £1.5-3K. Mine was a non-intrusive at £1.7K and will not be charged to the leaseholders (I'm buying, don't live there yet).

If the valuer insists it must be intrusive then it'll be £10,000s... You might have a fight on your hands asking the freeholder to commission one if they feel they don't need to - some refuse because the building is under 18m therefore no legal requirement.

I wouldn't believe the developers. Many stories out there about developers using materials not in the approved plan. I'm very active in the cladding community on Twitter and I don't know anyone in any purpose built flat who can report a sale in their block this year without EWS1.

Also, your buyer would be ill advised to buy without one because they could have serious problems when they want to remortgage in future - basically end up where you are, sadly, should no govt intervention happen to clear up this mess.

I hope for you it is also not intrusive.

P.s. It isn't just about the brick exterior or the insulation but also the fire breaks, inner cavity, how they are constructed and work together etc. The same materials put together in a one way in a building will form a different wall "system" than if put together differently in another, which means one might spread fire like a tinderbox and the other might not spread at all.

Government basically slapped AN14 together to mean all buildings are either "safe" or "dangerous" and there's a lot more to it... Crickets when thousands of people ask them to fix this mess. However, it is gaining media traction, I see light at the end of the tunnel.

Good luck, welcome to EWS1 nightmare...

crazyoldmaurice

annetheman said:

In short, unfortunately I can pretty much guarantee your buyer's lender will want an EWS1. It doesn't matter that there is no cladding, or that it is under 18m, all banks are asking for it since Advice Note 14 came out in January and are asking for it for any and every purpose built flat.

Your buyer may be lucky and their lender's valuer may say that an intrusive survey isn't required, then your freeholder is looking at a cost of £1.5-3K. Mine was a non-intrusive at £1.7K and will not be charged to the leaseholders (I'm buying, don't live there yet).

If the valuer insists it must be intrusive then it'll be £10,000s... You might have a fight on your hands asking the freeholder to commission one if they feel they don't need to - some refuse because the building is under 18m therefore no legal requirement.

I wouldn't believe the developers. Many stories out there about developers using materials not in the approved plan. I'm very active in the cladding community on Twitter and I don't know anyone in any purpose built flat who can report a sale in their block this year without EWS1.

Also, your buyer would be ill advised to buy without one because they could have serious problems when they want to remortgage in future - basically end up where you are, sadly, should no govt intervention happen to clear up this mess.

I hope for you it is also not intrusive.

P.s. It isn't just about the brick exterior or the insulation but also the fire breaks, inner cavity, how they are constructed and work together etc. The same materials put together in a one way in a building will form a different wall "system" than if put together differently in another, which means one might spread fire like a tinderbox and the other might not spread at all.

Government basically slapped AN14 together to mean all buildings are either "safe" or "dangerous" and there's a lot more to it... Crickets when thousands of people ask them to fix this mess. However, it is gaining media traction, I see light at the end of the tunnel.

Good luck, welcome to EWS1 nightmare...

A one bed flat in my 5 story no cladding SO block has "very recently" had its valuation and had lending secured without mentioning the ews1 according to my HA. I emailed them at the start of this week when I learnt about the ews1 and I knew another one bed went up for sale not long after ours so i asked them directly.

Waiting for a survey to be arranged for our flat at the moment so will keep you posted!

blue_max_3

crazyoldmaurice said:

A one bed flat in my 5 story no cladding SO block has "very recently" had its valuation and had lending secured without mentioning the ews1 according to my HA. I emailed them at the start of this week when I learnt about the ews1 and I knew another one bed went up for sale not long after ours so i asked them directly.

Waiting for a survey to be arranged for our flat at the moment so will keep you posted!

But if that changes after you have bought, you will be trapped and unable to sell. It's not just the buying that may be problematic.

crazyoldmaurice

blue_max_3 said:

crazyoldmaurice said:

A one bed flat in my 5 story no cladding SO block has "very recently" had its valuation and had lending secured without mentioning the ews1 according to my HA. I emailed them at the start of this week when I learnt about the ews1 and I knew another one bed went up for sale not long after ours so i asked them directly.

Waiting for a survey to be arranged for our flat at the moment so will keep you posted!

But if that changes after you have bought, you will be trapped and unable to sell. It's not just the buying that may be problematic.

Well we arent even attempting to buy; I was talking about selling our so flat. Until we have completed and exchanged we have decided not to even bother looking after this news.

annetheman

crazyoldmaurice said:

annetheman said:

In short, unfortunately I can pretty much guarantee your buyer's lender will want an EWS1. It doesn't matter that there is no cladding, or that it is under 18m, all banks are asking for it since Advice Note 14 came out in January and are asking for it for any and every purpose built flat.

Your buyer may be lucky and their lender's valuer may say that an intrusive survey isn't required, then your freeholder is looking at a cost of £1.5-3K. Mine was a non-intrusive at £1.7K and will not be charged to the leaseholders (I'm buying, don't live there yet).

If the valuer insists it must be intrusive then it'll be £10,000s... You might have a fight on your hands asking the freeholder to commission one if they feel they don't need to - some refuse because the building is under 18m therefore no legal requirement.

I wouldn't believe the developers. Many stories out there about developers using materials not in the approved plan. I'm very active in the cladding community on Twitter and I don't know anyone in any purpose built flat who can report a sale in their block this year without EWS1.

Also, your buyer would be ill advised to buy without one because they could have serious problems when they want to remortgage in future - basically end up where you are, sadly, should no govt intervention happen to clear up this mess.

I hope for you it is also not intrusive.

P.s. It isn't just about the brick exterior or the insulation but also the fire breaks, inner cavity, how they are constructed and work together etc. The same materials put together in a one way in a building will form a different wall "system" than if put together differently in another, which means one might spread fire like a tinderbox and the other might not spread at all.

Government basically slapped AN14 together to mean all buildings are either "safe" or "dangerous" and there's a lot more to it... Crickets when thousands of people ask them to fix this mess. However, it is gaining media traction, I see light at the end of the tunnel.

Good luck, welcome to EWS1 nightmare...

A one bed flat in my 5 story no cladding SO block has "very recently" had its valuation and had lending secured without mentioning the ews1 according to my HA. I emailed them at the start of this week when I learnt about the ews1 and I knew another one bed went up for sale not long after ours so i asked them directly.

Waiting for a survey to be arranged for our flat at the moment so will keep you posted!

I'd be really interested to know the lender, do you know?

Whoever bought it is going to have a hell of a time when it's remortgaging time with no EWS1. Not advised at all.

Durban

I have owned a one bedroom purpose built flat as a BTL for 7 years.

This is within a small block of 12 flats, 2 storey's and no cladding.  The block was built in 1985

The fixed rate has just expired and I have had no problems moving onto a better , 5 year fix with the same lender , Accord.

They didn't ask for the EWS1 and I was eligible for all their retention deals , didn't have to go onto their variable.

I am worried about this news.  However , I do not expect to sell for another 5 years so hopefully it will be sorted by then

[Deleted User]

Durban said:

I have owned a one bedroom purpose built flat as a BTL for 7 years.

This is within a small block of 12 flats, 2 storey's and no cladding.  The block was built in 1985

The fixed rate has just expired and I have had no problems moving onto a better , 5 year fix with the same lender , Accord.

They didn't ask for the EWS1 and I was eligible for all their retention deals , didn't have to go onto their variable.

I am worried about this news.  However , I do not expect to sell for another 5 years so hopefully it will be sorted by then

Staying with the same lender requires zero underwriting so they wouldn't check anything.  They can't get rid of you since you are there already. 

I guarantee that you will have been refused the mortgage if you went as a new customer to accord