The government must address financial losses not covered by the current “leaseholder protections” and ensure that leaseholders are not further penalised by an onerous mortgage lending process and exorbitant building insurance premiums.
The mortgage lending and valuation process for affected properties must not cause further detriment to leaseholders.
- The government should extend funding schemes and leaseholder protections to all buildings, all defects and all leaseholders, which would simplify the lender risk assessment process and enable mortgage lending to recommence at scale so people can move on with their lives.
- Mortgage lenders should reaffirm their commitment to lending without an EWS1 or additional information such as dates for remediation and fulfil the promise of the December 2022 Industry Statement in practice.
- Industry bodies should be encouraged to improve the EWS1 form to consider the overall building risk – both external and internal – with a simple yes/no rating stating whether remediation work is required.
- Mortgage lenders should be required to transparently record and report any impairment in property valuation due to building safety issues.
The government must act to reduce exorbitant buildings insurance costs.
- The government should back a risk-pooling reinsurance scheme to help ensure quicker and more substantial reductions in the costs paid by leaseholders, as suggested by the FCA’s 2022 report.
- HM Treasury should remove 12% Insurance Premium Tax from buildings affected by cladding and safety defects, and should not continue to profit from the harm being caused to leaseholders by skyrocketing insurance costs.
All financial losses should be covered by the Building Safety Act’s “leaseholder protections”.
- Property valuation losses and incremental buildings insurance should be treated as “relevant costs”.