EWS1, cladding and flats above shops: the mortgage cases most brokers refuse

Two of the hardest mortgage cases in the UK are a flat without an EWS1 form, and a flat above a commercial premises. Both are perfectly legal to buy and sell, but many lenders will not touch them, which means the buyer pool shrinks, the price drops, and the right broker matters more than the right rate.

Here is what is actually going on and how we get these cases through.

The EWS1 form

The EWS1 is an external wall fire safety assessment introduced after Grenfell. For buildings over 18 metres (and some below), many lenders will not lend without a satisfactory EWS1 on the whole block. If your block does not have one, or has one with an unsatisfactory outcome, most high-street lenders decline.

The honest position is that the freeholder is responsible for commissioning the EWS1, and the process has been slow, expensive and disputed. Some buildings are still without a form years later.

Which lenders will still lend

A small number of lenders will lend on a flat in a building without an EWS1, on a case-by-case basis, usually where the building is under 11 metres (where a form is not required) or where the remediation plan is funded and underway. We know which lenders these are and how to present the case.

Flats above commercial premises

Lenders are cautious about flats above takeaways, pubs, restaurants and some retail, because of fire risk, noise and the commercial tenant's activities. Most high-street lenders have a blanket exclusion above a certain commercial use class.

But several building societies and specialist lenders will lend above a shop, an office or a low-risk commercial unit, especially if the flat has its own entrance. The rate is often 0.5% to 1% higher, and the LTV may be capped at 75% rather than 90%.

The concrete and non-standard build

Flats in concrete-frame buildings, or with non-standard construction, trigger the same lender caution. The issue is not the construction itself, it is that the lender's valuer has to be comfortable with the build type, and many are not. We use lenders whose valuers know these buildings.

What this does to the price

A flat that most lenders will not mortgage sells for 5% to 15% less than a comparable flat they will, because the buyer pool is smaller. If you are buying, that is a discount. If you are selling, it is a cost, and the right broker can narrow it by finding a lender that will accept the case.

What we do

We identify the build type, the EWS1 position and the commercial use class before you apply, match the case to a lender that will actually lend, and present it properly to the underwriter rather than hoping the system says yes. We get more of these cases through than most, because we know which lenders are still open to them.