Source · Select Committees · Public Accounts Committee
Recommendation 18
18
Leaseholders in blocks with dangerous cladding have had their properties valued nil, making it impossible...
Conclusion
Leaseholders in blocks with dangerous cladding have had their properties valued nil, making it impossible for them to sell or remortgage. This issue was raised with us many times in written evidence from across the sector and confidentially from residents.54 It is unacceptable that leaseholders are in effect ‘mortgage prisoners’, through no fault of their own. The Department told us that lenders and surveyors have been more diligent in considering mortgage valuations, because of the risks identified since the Grenfell tragedy.55 The introduction of the External Wall Fire Review process in December 2019 was brought in to sort this issue. It was designed to provide assurances to lenders that the cladding system is safe or is in need of remediation, which should allow for an informed lending decision. Identifying what work is required, when it will be carried out and how it will be funded should be considered in the valuation process, and certified by a professional with an EWS1 form.56
Government Response
Not Addressed
HM Government
Not Addressed
5.3 The department is aware that some lenders and valuers are using the RICS EWS1 valuation process for multi-storey, multi-occupancy residential blocks of any height. The department does not support this blanket approach, especially for lower rise blocks. The department has therefore been encouraging lenders to adopt a more proportionate response and use other equivalent evidence to support building safety and valuation assessments.