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New build, ex-council and cladding: mortgage on flats lenders look at closely

Sometimes the borrower is fine and it is the property that slows things down. New build homes, ex-council flats and buildings with cladding or fire-safety questions are three of the most common examples. Each can be mortgageable, but each comes with checks that a standard house does not. This note is general information from Property Money Limited — not advice and not a personal recommendation.

The problem

A buyer has their income, deposit and agreement in principle sorted, then the valuation comes back with conditions — or a down-valuation, or a refusal. The reason is the building: it is a new build with a premium price, a flat above a certain height, an ex-council block with unusual construction, or a block where the external walls need checking. Knowing what lenders look for before you commit can save fees and time.

Mortgage on a new build: what lenders typically check

• Loan-to-value. Some lenders set lower maximum LTVs for new builds, particularly new build flats, than for older homes.
• Price and incentives. New homes can carry a “new build premium”. Developers declare incentives — paid fees, furniture, cashback — on a standard disclosure form, and lenders may deduct some of them from the price they lend against.
• Warranty. Lenders usually want a recognised new home warranty or a professional consultant’s certificate in place.
• Offer timing. If the home is not finished, the mortgage offer must still be valid at completion. Offer lengths for new builds vary, and extensions are not guaranteed.
• Developer concentration. On some large developments or blocks, lenders limit how much they will lend in a single building.

Mortgage on an ex-council flat or house

• Construction. Some former council homes were built using non-standard methods, such as certain concrete systems. A few types are designated defective and may need a repair certificate. Lenders’ appetite varies by construction type.
• Height and access. Some lenders restrict flats in high-rise blocks or with deck or walkway access.
• Owner-occupation and local demand. Some look at how many flats in a block are privately owned versus still council-let, as a proxy for resale.
• Right to Buy rules. In England, homes bought under Right to Buy carry conditions — for example, part of the discount may have to be repaid if the home is sold within five years, and the former landlord may have a right of first refusal for a period. Your conveyancer will check these.

EWS1 form mortgage questions and cladding

After the Grenfell Tower fire, lenders became much more careful about flats in buildings with cladding or other external wall concerns. The EWS1 form is a standardised way for a qualified professional to record an assessment of a building’s external walls for valuation purposes. It is not a legal requirement, and not every building needs one.

• When one is asked for. It depends on the building’s height, what the walls are made of, balconies, and current valuation guidance. Valuers decide case by case.
• The rating matters. Some outcomes indicate no remedial works are needed; others indicate works are required. Lenders treat these very differently.
• Remediation and leaseholder protections. The Building Safety Act 2022 introduced protections that limit what qualifying leaseholders can be charged for certain remediation. Whether those apply depends on the lease and the building, and is a question for your conveyancer.
• Timescales. If the freeholder has not arranged an assessment, getting one can take time. That can derail a purchase timetable.

Got a property that is giving lenders pause? Send us the facts — a few lines is enough.

Mortgagability in plain terms

Mortgagability here means: will a lender accept this building — its age, construction, height, wall system and paperwork — as security for this loan? The borrower can be strong and the answer still depend on the property. It is worth asking for the building information early, before paying for searches and surveys.

How criteria vary between lenders

Property criteria are less visible than income criteria, and they move. One lender may be comfortable with a flat on the tenth floor of an ex-council block; another may cap at a lower number of storeys. One may accept a particular concrete construction with the right certificate; another may not lend on it at all. New build policies differ on maximum loan-to-value for flats, how incentives are treated and how long offers last. On clad buildings, lenders and valuers have updated their approach several times since 2019, so what applied when a neighbour bought may not apply now. That is why it is worth checking the building against current criteria before you pay for searches and surveys.

Before you commit

Ask the agent or developer for the construction type, number of storeys, any EWS1 or fire-risk documents, the warranty provider for new builds, and the details of any incentives. For leasehold flats, the lease and service charge position matter too — see leasehold, ground rent and service charges.

If you used Help to Buy on a new build in the past and are now moving or remortgaging, a separate set of rules applies. See remortgage with Help to Buy.

Specialist property often means a narrower set of lenders and sometimes higher pricing. That can still be a sound purchase if the payment fits. Check whether your household would cope if income stopped. The protection gap analyser is an optional illustrative check only.

New build, ex-council and EWS1: common questions

Next step

Gather the address, property type, number of storeys, construction details if known, any EWS1 or fire-safety paperwork, and for new builds the warranty and incentive details. Add your income and deposit, and we can see which lenders are realistic for that building.