Cladding campaigners have described the change as a step forward but there are caveats, ITV News' social affairs correspondent Sarah Corker reports
Six major banks – Barclays, HSBC, Lloyds, Nationwide, NatWest and Santander - have re-started lending on affected properties over 11 metres from 9th January.
It’s supposed to be a lifeline for people who have been trapped in unsellable, worthless homes, but some flat-owners like Emma Lee from South London have told ITV News that the financial damage has already been done after years of inflated costs.
“Nothing’s going to be left potentially for myself or my kids, there are moments when I thought I would end up declaring for bankruptcy.
"Every month, I get an email telling me my mortgage rate is going up again because I’m on a tracker, and the cost of living is making things even harder,” she said.
No work has started to remove the dangerous cladding on Ms Lee’s building and she said this announcement will do little to help her family move on.
A single mum with two children, her one bed flat is cramped and overcrowded; she sleeps on a fold down bed in the living room, which is also used as her office, playroom for the kids and a place to eat.
No work has started to remove the dangerous cladding on Emma Lee's building in South London
“We've not heard anything about when it's going to be fixed, no timeline in place to sort it out, the developers have disappeared,” said Ms Lee.
“I don’t know how much longer this is sustainable because at the moment I am just hanging on by a thread.”
The cladding crisis has paralysed parts of the property market for years.
UK Finance, which represents the banking industry, said "for medium and high-rise buildings in England with cladding and building safety issues, the announcement is a significant step to enable lending to recommence."
Cladding campaigners have described the change as a step forward, but there are caveats; flat owners will still have to prove that the dangerous materials will be removed by developers or covered by government funding.
That means leaseholders like Rachael Loftus in Leeds are still no further forward.
With no agreement over who will pay to fix her building, Rachel is still stuck and every quarter receives a huge bill from the freeholder with her apportion of the remediation costs.
“In my case it’s over £100,000, and then they tell us, ‘oh no, we're not actually asking for the money. We just need to account for it in your name.’ Which for them might be very convenient, but for me it's still an absolute kick in the teeth every single quarter that that bill comes and I can see that figure against my name," she said.
“So it just means you've got no choices, no ability to plan ahead if you have no idea how much your home is worth and if you're ever going to be able to sell it,” she added.
Flat sales as a proportion of all home sales since 2012
Graph analysis of ONS Data by Capital Economics.
Even those who can sell may struggle to find buyers or be forced to sell at a loss.
Property consultant Alex Goldstein warned that banks will be "very hesitant to actually lend on these properties - just because they can doesn't mean they will."
“Reducing the price is the only way as some buyers will avoid these properties at all costs. If you are a seller, and desperate to move, you are going to have to sell at a significant discount,” he said.
The government estimates this policy will help at least 100,000 people to sell their homes and "get the property market moving again."
“This is possible because of the protections for leaseholders in the Building Safety Act, and our commitment to getting buildings fixed, whether through our own remediation schemes or as a result of the pledge from developers,” a spokesperson for the Department for Levelling Up, Housing and Communities said.
Want a quick and expert briefing on the biggest news stories? Listen to our latest podcasts to find out What You Need To know