EWS1 for converted MUFB remortgage

For multi-unit freehold blocks (MUFBs) with more than 10 units, financing often falls under the remit of commercial buy-to-let lenders or even full commercial mortgage lenders. These lenders specialise in handling larger, more complex properties, offering MUFB investment mortgages that are tailored to the needs of professional landlords and portfolio investors. Unlike traditional buy-to-let providers, these lenders tend to have more flexible underwriting criteria, taking into account the property’s income potential, tenancy structure, and overall condition.

Key Factors for High-Rise MUFB Blocks

When assessing applications for high-rise blocks, lenders evaluate several structural and safety factors that can impact both the property’s value and the terms offered.

Lift Availability: High-rise buildings without a lift can be less appealing to both tenants and lenders. Accessibility is a key factor for rental desirability, and properties with lift access often achieve stronger valuations. The presence of a lift is typically considered a positive feature that can help secure the best MUFB mortgage rates.

Cladding and EWS1 Certification: Cladding has become a major consideration in the mortgage market since the Grenfell Tower tragedy. Lenders now require evidence that a building’s external wall system meets fire safety standards. The EWS1 form (External Wall System 1 certification) is a crucial document used to confirm that the external wall materials have been professionally assessed. Without EWS1 certification, or if cladding issues are identified, securing finance from MUFB mortgage lenders can become difficult.

Impact of EWS1 on MUFB Mortgages

Approval Process: Having a valid EWS1 certificate can significantly streamline the mortgage approval process. It provides lenders with the assurance that the property meets modern fire safety requirements, reducing the perceived risk associated with the investment.

Property Valuation: Properties with unresolved cladding issues or lacking EWS1 certification may experience reduced valuations. This directly impacts borrowing capacity, as the loan amount for MUFB investment mortgages is typically tied to the property’s assessed value. A lower valuation could result in less favourable terms or higher interest rates.

Planning Finance for Large MUFBs

For investors considering large MUFBs, using an MUFB mortgage calculator is a useful first step to estimate borrowing potential based on income, stress testing, and property value. Pairing this with advice from an experienced broker can help identify the best MUFB mortgage rates from lenders who are familiar with high-rise developments and the challenges that come with them.