- Virgin Money, TSB and Skipton Building Society have added their names to a statement already signed by six major lenders
- Those affected by building safety issues will be given more choice if wanting to buy, sell or remortgage their home
- Over three quarters of mortgage lending in the country is now covered by the commitment, helping more people get on with their lives
Three high street lenders, Virgin Money, TSB and Skipton Building Society, have joined the commitment to offer mortgages on properties affected by building safety issues.
The three lenders will now consider mortgage applications for properties in buildings that are yet to be remediated, or where leaseholders are protected from remediation costs. This gives those looking to buy, sell and remortgage more choice, allowing people to get on with their lives.
Over three quarters of mortgage lending within England is now covered by the commitment, with the three new lenders recognising the impact of the Government's reforms and progress in delivering building safety for those who live in high rise properties.
Supported by UK Finance and the Building Societies Association, Virgin Money, TSB and Skipton Building Society are among the latest lenders to add their names to the statement, a year after the first six largest lenders made the same public commitment.
Minister for Building Safety, Lee Rowley, said:
I am extremely pleased to see three new lenders doing the right thing and supporting leaseholders who are stuck in homes with building safety defects.
This is a further sign of the market's confidence in the solutions that we have put in place to protect leaseholders.
From today, customers impacted by building safety issues will have more choice when looking to buy or re-mortgage. I would encourage more banks and building societies to join the commitment made by Virgin Money, TSB and Skipton.
Karen Appleton, Head of Mortgage Lending at Skipton Building Society, said:
I'm really proud that Skipton Building Society has worked with DLUHC and industry experts to make it possible to sign up to the joint statement, in order to further support customers impacted by the cladding crisis and to play a part in opening up the lending market for flats.
Julian Adams, Head of Property Risk at TSB, said:
TSB is pleased to support the Industry Statement and to offer borrowers greater choice when seeking a mortgage.
Valuation firms have also played their part in the efforts to improve customers' journeys. For example Virgin Money's valuation panel manager, E.SURV, is the latest to work with the Department to receive information on affected buildings which will help streamline their valuation processes. Along with other lenders and valuation firms this will ensure a smooth experience for customers looking to buy, sell or re-mortgage their property.
This latest announcement demonstrates that protecting leaseholders in buildings with fire safety defects from unfair costs remains a Government priority.
The department has taken a number of steps to protect innocent leaseholders from remediation costs since the Grenfell Tower tragedy in 2017, introducing some of the toughest building safety regulations in the world through our landmark Building Safety Act.
The Act confirmed that those responsible for unsafe cladding, and not blameless leaseholders, will be the ones to pay to fix it.
Moreover, in October this year, the department announced that the Government has agreed a pledge with five-sector leading insurance brokers, which could lead to thousands of leaseholders in buildings with identified fire safety issues seeing a significant reduction in their insurance premiums.
The Leasehold and Freehold Reform Bill, introduced to Parliament last month, will help us go even further to protect leaseholders by delivering the Government's manifesto commitments on leasehold reform.
The Bill will include measures to amend the Building Safety Act 2022 to make it easier to ensure that those who caused building safety defects in enfranchised buildings are made to pay, and that the leaseholder protections are not unfairly weighted against those who own properties jointly.
Within this legislation, we will ban building insurance commissions for freeholders and managing agents and replace these with transparent handling fees to stop leaseholders being charged excessive and opaque commissions.
The Government is also already consulting on options to cap ground rents for existing leases that will protect leaseholders from facing unregulated ground rents for no service in return. The consultation closes on 21 December and the Government will respond shortly afterwards.
Notes
- Subject to their normal policy requirements, lenders will consider mortgage applications on properties in buildings in England of 11 metres or five storeys and above in height with building safety issues. There is no requirement for a building to have been remediated, providing it is being self-remediated by developers, is covered by a recognised government scheme, or the property is protected by the leaseholder protections in the Building Safety Act, as evidenced by a leaseholder deed of certificate.
