‘Unaffordable cladding-hit mortgage rates are crippling us, what can we do?’

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

Back in March, we were able to help Andy, a Nationwide mortgage customer whose consent-to-let had expired. 

Unable to remortgage due to the building’s unfavourable external wall survey (EWS1) rating, he was left paying an additional £4,000 per year for his lender's standard variable rate.

When we contacted Nationwide on Andy’s behalf it sympathised with his situation and, fortunately, we were able to get the rate reduced while his building awaits its critical remedial works.

But Andy wasn’t alone. After we published his story, four more cladding-hit leaseholders came to us for help, all of whom were in similar situations. These ‘accidental landlords’ had all been unable to sell due to unfavourable EWS1 ratings. 

With their properties unmortgage-able and valued at £0, they instead took the drastic action of renting their flats out under a ‘consent-to-let’ arrangement, in which the lender grants permission to the owner to let the property for a set period of time.

But once that consent-to-let was set to expire, they found themselves in the same situation as Andy: unable to remortgage and facing a rate that adds hundreds to their monthly bills.

Put to Rights

Despite government interventions and new measures announced intending to spare innocent leaseholders from the costs of remediation and some interim measures, the cladding and building safety crisis continues to trap potentially millions of flat owners in unsafe, unsellable properties.

As we showed in March, some lenders are willing to help find solutions for those who find themselves in these situations through no fault of their own. Of the four new leaseholders who contacted us this time, three were with Nationwide and one with Halifax.

We’re pleased to say that, after we contacted Nationwide and Halifax on their behalf, all four had their mortgage rates reduced while their buildings await remedial work.

A spokesperson for Nationwide said: 'We sympathise with these members' situations 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 them and we have been doing all we can to support them and others who find themselves facing issues relating to cladding.

 'We have spoken to the members and agreed an interim solution that will help make the situation and monthly payments more manageable. 

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

A spokesperson for Halifax said: 'We will always look at how we might support our customers in the most appropriate way.  In this instance, once the customer had spoken to us directly and we could assess their position fully, we were able to offer an alternative mortgage product.'

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 and the other leaseholders here 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, along with a ‘waterfall’ system of cost responsibility and caps on how much leaseholders can pay, but it remains to be seen how it will be implemented in reality.
• As we’ve found, some banks are willing to work with leaseholders to find solutions to remortgaging so it's important to reach out for help.

Get in touch. If you've got a consumer rights problem you need put right email us at yourstory@which.co.uk. Please be aware that we cannot help with, or respond to, every email that we receive. The inbox is monitored periodically during office hours, Monday-Friday 9am-5pm.