Cladding issues continue in the shared ownership sector

The Building Safety Act, which came into effect in June this year, has definitely helped take the edge off of the cladding crisis. Now, leaseholders in England in buildings above 11 metres or five storeys high with historical safety defects are exempt from being charged for the removal of cladding. The Act ensures that those who built defective buildings take responsibility for remedying them and that the industry contributes to fixing the problem. If they attempt to dump the cost on to individual leaseholders, they could face up to ten years in prison.

While this comes as a huge relief for those caught up in this post-Grenfell building safety debacle, there are still hurdles that these leaseholders must jump if wishing to sell their property and move somewhere new. This especially impacts shared owners, who make up a whopping 83 per cent of those affected. Many have already paid thousands in lease extensions (traditionally shared home owners are granted shorter leases), having unacceptably dipped below 80 years as a direct result of the lengthy delays caused by the high demand for EWS1s as insisted upon by nervous lenders.

Today, the issue again lies with hesitant lenders, with many still not willing to lend on cladding hit properties. However, some are starting to relax their position and may consider if the housing association that generally owns the property has agreed to pay for the cladding to be replaced and are either in the throes of doing so or will commence the process within a reasonable timeframe. But this hit and miss approach from lenders does present some challenges for prospective buyers, who may decide to steer well clear. For the vendors, meanwhile, assuming that they have managed to secure a buyer, the prospect of porting their current mortgage to their new property can also be fraught with difficulty. Some will allow a deal to be carried across to a non-shared ownership property, whereas others will not. What is agreed is that their first port of call should always be their existing lender and then speak to a mortgage broker to compare options.

In time, it is hoped that the gesture of faith displayed by certain lenders in lending on flats in blocks with cladding will eventually encourage a major change in lending policy.