Could lenders affect future building standards?

05 July 2017

By Richard Pike, sales and marketing director, Phoebus Software Ltd

There cannot have been a soul who has not been struck by the dreadful tragedy of the fire in Grenfell Tower.  The speed with which the fire swept through the building and the tragic loss of life as a result is truly horrifying. Instant action is taking place with up to 600 tower blocks being checked for similar cladding and other defects.  Hopefully, combined with more regimented fire safety standards, this sort of tragedy will not happen again.

Even if tower blocks are considered safe, it could be people could decide that they no longer want to live in such accommodation thus sparking a potential exodus and further pressure on housing capacity.   As many of the occupants of such housing tend to be tenants rather than owner occupiers it could also leave institutional owners with a number of vacant flats potentially reducing the appeal of multi-story residential properties as investments.  In West London particularly, you only need to look at the owners and tenants of some ex-council properties to see that this accommodation can also be occupied by the wealthy. Some lenders have lent on this accommodation type dependant on criteria such as number of owner occupied units and how many floors are in the block, etc.

This raises the question, should lenders rely on current building standards as suitable security? Following the housing white paper, lenders will already be considering how they will lend against new methods of construction. Checks will need to be made to ensure that materials used in modern construction techniques such as off-site construction are safe. In addition, with more social housing being built, clearly any council funded construction will now be given more scrutiny.

It is clear that the issue of safe accommodation will be driven at governmental level to get a joined up approach nationally, but lenders can be seen as taking the lead and effecting change to support the government at an early stage.  For example, could lenders drive improvement by also pushing for a rapid overhaul of building and safety legislations and potentially implementing positive changes to valuation policies to show a positive reaction to this tragedy?

We will undoubtedly have to wait for the result of the public enquiry to find out how Grenfell and potentially other blocks were cladded with materials banned for construction in the US and Germany. One thing is certain, none of us want a repeat of this tragedy on any scale, and most importantly future lives will be saved by the findings of the enquiry, and any policy changes implemented accordingly.    

 

Media contact

Debbie Staveley
Director and Owner,
bClear Communications

Telephone
+44 (0)1275 542 511

Email

By using this site you are consenting to the use of cookies. Find out more about cookies and why we use them. ×