A safety form became a market trap. After Grenfell, lenders demanded an EWS1 certificate before mortgaging flats in taller blocks - and without one, thousands of cladding-hit flats became unmortgageable, unsellable, and in some cases valued at zero. The leaseholders and flat-owning companies caught in that gridlock are exactly what GalimAI maps. This study reads the paralysis from that proprietary view.
What GalimAI’s own data reveals
A frozen market is invisible in a price index but specific in GalimAI’s data. Across the 463,022 property-owning companies and more than 1,000,000 owners it maps sit the buy-to-let and flat-owning companies, and the freeholders, holding stock in affected blocks - each linked to what it owns, how it is financed and the distress around it. A flat that cannot be sold or refinanced is not an anecdote in our data; it is a specific owner stuck.
That is the unique value. The leaseholders and companies that cannot exit, refinance or recover value appear in GalimAI as strain: the most heavily-leveraged flat-owning companies that cannot refinance a mortgage the lender now questions, those flashing stacked distress signals, and the concentrations in our regional distress map. This study sits alongside our analysis of the Building Safety Act and developer distress - the same crisis seen from the leaseholder, not the developer, side.
For a funded buyer that is the edge: the flat-owning companies trapped by the cladding gridlock - the most likely distressed sellers once a route opens - are a reachable list of named owners in GalimAI.
What changed: the EWS1 bottleneck
After the Grenfell fire, lenders began requiring an EWS1 (External Wall System) form before mortgaging flats in taller buildings. Without a satisfactory form, a flat could not be mortgaged - so it could not be sold to anyone needing a mortgage, and was often valued at £0 for lending purposes.
The bottleneck eased only slowly. By late 2023, nine lenders representing more than 75% of the market had committed to lend without an EWS1 in some cases, yet an EWS1 was still requested for a meaningful share of flat valuations - around 9% in the final quarter of 2023, and roughly 62% of valuations in buildings over seven storeys in mid-2023 - leaving many owners trapped.
The public backdrop
The public picture is a slow-clearing logjam: thousands of EWS1 requests a year, a large share of tall-building valuations still gated, and leaseholders unable to sell or remortgage homes valued at nothing for lending. What the public data does not show is which companies and owners hold that trapped stock and how leveraged they are. That is the connection GalimAI’s map makes.
The most plausible mechanism
When lenders cannot price fire-safety risk, they decline to lend; without finance, affected flats cannot be sold or remortgaged, freezing owners in place and crushing values for lending purposes. Highly-geared flat-owning companies that need to refinance are hit hardest. We present this as a clear regulatory-and-lending cause with a concentrated effect, not proof that EWS1 alone explains any single failure - interest rates and remediation costs press on the same owners.
Sources
The proprietary figures in this study (the 463,022 companies, 1,000,000+ owners and the distress signals) are GalimAI first-party data. The public background figures are drawn from:
- UK Finance - industry statement on cladding (EWS1)
- End Our Cladding Scandal - half of high-rise mortgage valuations still require an EWS1
Frequently asked questions
What does GalimAI's own data add here?
It names the trapped owners. GalimAI maps 463,022 property companies and 1M+ owners with live distress signals, so the flat-owning companies and freeholders caught in the EWS1/cladding gridlock - and most likely to become distressed sellers - are visible rather than aggregated.
What is the EWS1 problem?
After Grenfell, lenders required an EWS1 fire-safety form before mortgaging flats in taller blocks. Without one, flats became unmortgageable and unsellable, often valued at 0 pounds for lending. By late 2023 nine lenders (75%+ of the market) had eased criteria, but EWS1s were still requested for many tall-building valuations.
How does it cause distress?
No finance means no sale or remortgage, freezing owners and crushing values - hitting geared flat-owning companies that need to refinance hardest. A clear regulatory-and-lending cause with a concentrated effect, not single-cause proof.
How can investors use this?
The flat-owning companies trapped by the cladding gridlock - the most likely distressed sellers once a route opens - are a reachable list of named owners in GalimAI.