Leaseholder Library
Welcome to the Leaseholder Library
ARMA self-service library offers guidance to leaseholders. We would recommend that you view the documents available to see if they can assist.
If they do not, or you require further information then please contact the Leasehold Advisory Service at info@lease-advice.org. They are a government funded body who are able to assist you and they provide free information, initial advice and guidance to members of the public about residential leasehold. They are independent and impartial and all of their advisers are legally qualified.
ARMA advice on cladding and the mortgage market
In this section we want to provide help and information to leaseholders on what is happening in the cladding and mortgage market.
The Government introduced Advice Note 14 (AN14) in December 2018. It has had unintended consequences in that it effectively requires buildings to conform to today’s building safety standards rather than those at the time it was built. Prior to this as long as the building was signed off when it was built, that was deemed sufficient.
This has led to a number of problems:
- Lenders have reacted by saying that they will only lend if AN14 is being adhered to. This leads valuers who spot something combustible on the side of a building to halt the mortgage administration process by applying a nominal £0 valuation until they can gather more details. This doesn’t necessarily mean the flat is worthless, it is simply a mechanism to stop the application process. But it will still provide an unpleasant shock to anyone who is selling.
- To fully conform to AN14 the exterior wall system needs to pass a stringent test (namely BS8414), that costs tens of thousands of pounds and can take months to perform.
- The alternative is to have a fire safety expert examine the building and sign it off as safe in their professional opinion. However, the Professional Indemnity insurance market has been rapidly reducing cover available to those experts, meaning they are unable to advise without exposing themselves to huge personal liability.
Leaseholders who are finding their flat sale/purchase has stalled because of the £0 valuations are, quite understandably, looking for someone to blame and the managing agent is the first in view. But this isn’t right or fair as it isn’t their fault and they will be trying hard to help where they can. A cross-industry group, led by the Royal Institution of Chartered Surveyors (RICS), has been working tirelessly to try to find a way forward and recently released a form – the EWS1 – that the industry can use and lenders will accept. However, if there are dangerous materials found present this will have to be addressed.
John Baguley, Tangible Assets Valuation Director at RICS, said:
“To unclog areas of the market, a qualified and experienced fire safety expert will be appointed by the building owner to provide a report on the buildings cladding, and associated wall system, as an additional part of the valuation process.
“This will ensure safety and will also ultimately allow the high-rise property market to function properly.” The new process was devised by RICS, working with the Building Societies Association and UK Finance, which represents lenders.”
We have provided the below information for leaseholders and these documents can be downloaded as PDFs (see left hand side):