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Lender refuses mortgages on housing association flats due to fire safety concerns
A mortgage lender has refused to provide loans for shared ownership on a housing association’s block of flats on fire safety grounds.
Genesis, a 33,000-home landlord which is set to merge with Notting Hill Housing, is trying to sell 50 flats for shared ownership in Richmond House, a seven-storey block in Southend, Essex.
But Leeds Building Society has declined to offer mortgages in the block, citing concerns about the block’s lack of a sprinkler system and uncertainty over what the commercial space on the building’s ground floor will be used for.
Genesis has insisted that Richmond House is fully compliant with building regulations and said it is in discussions with Leeds Building Society to try to resolve its issues.
Cladding on the block was found to be non-compliant following the Grenfell Tower fire on 14 June last year and has since been replaced.
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A spokesperson for the housing association said: “Sprinklers are not currently required or recommended in buildings of this type as it is only seven storeys high with two stairwells for evacuation in the event of fire.
“Genesis takes fire safety very seriously and has taken swift action where required to ensure our buildings are compliant, but Richmond House already fulfils all safety requirements.
“In terms of the mortgage refusal, it’s disappointing that a lender has refused an application for a property that is compliant with all fire safety requirements. It is probable they are applying their own specific criteria when deciding approvals.”
A spokesperson for Leeds Building Society said: “For every mortgage application we rely on an independent expert valuation as to whether a property has suitable security for a mortgage.
“An independent valuer assessed this apartment and concluded that it did not provide suitable security.
“We reviewed our criteria following the Grenfell Tower fire and concluded no changes [to the criteria] were required.”
Richmond House is being redeveloped from an old office block by construction firm Randall Watts, along with the adjacent 12-storey Beaumont Court.
Flats are being sold at market rates in the latter block, which will have sprinklers installed.
