Ministerial Working Group on Mortgage Lending and Cladding: report - March 2021

Background to the Group

1. Since 2019, people in Scotland have been experiencing difficulties when trying to buy, sell or remortgage flatted residential properties in buildings with external wall cladding. The people affected are facing difficult circumstances and there is a need for action from all sectors to resolve the matter as quickly as possible.

2. The Ministerial Working Group was established in 2020 bringing together relevant public, private, professional and commercial interests with a remit to address the issues, risks and obstacles involved and to develop solutions. The work of this Group builds on previous work of Government through the Ministerial Working Group on Building and Fire Safety established after the Grenfell Tower tragedy. However, while the focus of that Working Group has been and continues to be on improving safety measures in buildings, the Ministerial Working Group on Mortgage Lending and Cladding has had its focus on actions required to enable people to buy, sell and remortgage properties in buildings with external wall cladding.

3. From the outset the Group has been clear that valuation and mortgage lending issues have arisen because of real safety concerns arising from the tragic events at Grenfell Tower. Everyone involved in this work agrees that the approach must be to address these safety concerns – which extend beyond those who own property – and that this in turn will lead to solutions for the issues experienced by people in property transactions.

4. This Report is the culmination of the Group’s work over the past year and includes practical considerations on the operation of the EWS1 process, and addresses broader issues. The conclusions reached focus on actions that are needed to improve the situation for people buying, selling and remortgaging flatted residential property in Scotland but also would, if implemented, see wider assurance on the safety of people.