Residential  

Lenders order extra checks after Grenfell blaze

The government has commissioned an independent review of building regulations and fire safety, which is now underway and will report by Easter next year.

The broker involved in the Precise case said: "Leaseholders, for their own safety or that of tenants, should be insisting building managers employ professionals to check cladding; this is now compounded by a financial incentive. 

“This development may delay future sales whilst tests are conducted, or prevent sales, as dangerously cladded properties become unmortgageable as well as undesirable."

David Hollingworth, associate director of communications at mortgage broker London and Country, commented: "We have seen a case where it initially appeared that fire safety was being considered in the valuation, but it was impossible to pinpoint it as a reason for a decline.  

"The lender certainly didn't suggest that there had been a change in policy, and of course they can only act on the valuer's recommendation."

He added: “We have not seen any formal communication to suggest changes have been made. High-rise buildings can be hard to lend on anyway.

“If lenders are going to make a change of approach because of that method of cladding, then really we need some kind of guidance around that so brokers can make appropriate recommendations.”

Martin Stewart, director at London Money, said he had not come across any anecdotal evidence that the extra checks were being mandated.

He said: “I daresay the market will self-regulate to a degree until such time the report into the Grenfell fire is released.

“I also think buyers themselves will undertake more due diligence if they look to purchase a high-rise flat.”

simon.allin@ft.com