A number of leaseholders have been in contact with the HML Group recently, regarding trouble they may have been having in selling or re-mortgaging their property. Following the tragic fire at Grenfell Tower, as well as a number of highly publicised fires recently the Government introduced new guidance focused on the fire safety of external elements of residential buildings (particularly the façade, cladding and balconies).
This has resulted in mortgage lenders and valuers requiring more detailed technical information than they did previously, and whilst Government guidance focuses on buildings 18m and over, many mortgage lenders are choosing to apply this guidance to all buildings.
The information currently being requested usually relates to the materials installed to the exterior of buildings, as well as details over its installation and any sub materials or structure (such as insulation).
At HML Group, our highest priority is the resident’s safety and we will continue to work to ensure this. Where we have the information that mortgage lenders have requested for your building, we will pass this on. However, as the Property Manager, and not the building owner, or developer, we aren’t always provided with this information. It is unfortunately not uncommon that builders or developers do not pass this information on. Where the information has been provided and so long as the building was constructed as per the plans, this may be sufficient for mortgage lenders.
In cases where the information is not available, or mortgage lenders require more detailed information than is, it is usually necessary to arrange for surveys and investigations to be carried out, to gain a proper understanding of the external elements of the building. These surveys can sometimes be costly and lengthy.
Statements of compliance
Additionally, some mortgage lenders have been requesting statements of compliance from one of a number of professionals, to confirm that buildings meet all of the requirements of the guidance notes issued by the Ministry of Housing, Communities and Local Government (MHCLG). These professionals are typically required to be chartered members of organizations such as RICS (Royal Institute of Chartered Surveyors), or IFE (Institution of Fire Engineers). It is only possible for them to provide statements of compliance either following an extensive investigation, and accurate information supplied from the time of construction.
This issue is not limited to HML Group, and is unfortunately happening across the residential leasehold industry. Valuers assigning zero value to properties, or mortgage lenders refusing to lend against properties does not mean these properties are unsafe, only that queries about the construction are holding up the mortgage application from progressing. Further information can be found from the Ministry of Housing, Communities and Local Government document ‘Advice Note 14 – Advice on external wall systems that do not incorporate Aluminium Composite Material’ and the ARMA issued guidance ‘MHCLG Advice on Building Fire Safety and Implications for Mortgage Providers’.
Please click here for further advice from ARMA.