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14 Feb 2022

'The cladding scandal has left my mortgage unaffordable'

How some mortgage lenders are willing to work with victims of the cladding scandal to find practical solutions to mortgage issues

Do you have an issue you need to put right? Which? is here to help get your consumer problems sorted.

Dear Which?,

I'm the leaseholder of a flat affected by the cladding scandal that has been deemed a fire-risk. As a result, it has been valued at £0 and I am unable to sell or convert to a buy-to-let mortgage.

I have been placed on Nationwide's Standard Mortgage Rate at 4.59% - this costs me an additional £4,000 per year.

I cannot afford to keep paying this rate, but I'm having no luck challenging it. I've heard some banks are willing to work with leaseholders to find solutions to this impasse. Can you help?

Andy*, London. (*name changed)

Put to Rights

George Martin, Which?'s cladding expert says:

The cladding and building safety crisis has trapped potentially millions of flat owners in unsafe, unsellable properties. The bills they face to remediate these buildings are life-changing and, for many, it will mean bankruptcy through no fault of their own.

An external wall survey form (EWS1) was designed to rate buildings according to risk and reassure lenders. However, those, such as yours, which have failed to meet the required standards are given a 'B2' rating, indicating that expensive remedial work is required, which banks will not accept.

Being forced to pay an additional £4,000 per year is clearly unsustainable, but it is true that some banks are willing to work with affected leaseholders to ease the burden in the interim.

We contacted Nationwide on your behalf, asking how your costs could be reduced until a solution had been confirmed to remediate the building. Nationwide investigated the case and, following talks between you and the bank, plus clarification of the building's future remediation works, we were able to reduce your rate by around 2%.

Your mortgage payments are now manageable, but the stress of the cladding scandal remains as you continue to tackle the safety issues with your building. The government has announced more support could be on the way to fix buildings like yours, but it remains to be seen how and when this will be implemented.

A Nationwide spokesperson said: 'We sympathise with the member's situation but it's important that we lend responsibly and protect and give assurance to our members.

'We understand how frustrating the present situation is for the member and we have been doing all we can to support both him and others who find themselves facing issues relating to cladding. We have spoken to the member and agreed an interim solution that will help make the situation and monthly payments more manageable.

'We will continue to support the member and once the written confirmation has been received from the building owner that the cladding issues will be resolved, we will put him in touch with our buy-to-let arm to start the remortgage process.'

Need to know

  • Leaseholders affected by the cladding scandal whose mortgage terms are ending should be able to switch to a new product with the same lender.
  • If you need to remortgage, you will likely run into the same issues as Andy unless your EWS1 form shows a favourable rating.
  • The government has recently announced its intention for developers to pay to fix dangerous buildings between 11 and 18 metres tall.

While some banks will work with leaseholders to find solutions to remortgaging, the wider cladding scandal continues to cause misery for its victims.

Get in touch.

If you've got a consumer rights problem you need put right, email us at yourstory@which.co.uk.

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