The Government has announced that leaseholders in buildings without cladding will no longer need an EWS1 fire safety form to sell or re-mortgage their property. Exactly the headline homeowners had hoped to hear for months.
The EWS1 process requires a qualified engineer to carry out a survey on a building to assess whether the external wall contains dangerous materials. If the building is clear of such materials, the engineer can give the building a clean bill of health on the EWS form and allow sale or re-mortgage to proceed. If however there are dangerous materials present, the engineer recommends that costly remedial works will be needed before leaseholders could sell or re-mortgage their flat.
The process is one of the main initiatives introduced after the Grenfell Tower tragedy in order to assess the fire safety of the external wall construction in residential high-rise buildings (18 metres or more above the ground) or where specific concerns exist. The request for an EWS1 assessment has had great impact on the approval of mortgages as it has been widely requested by banks and mortgage lenders, regardless of height of building, or if any cladding is present.
The form is valid for five years and covers the building as a whole; separate forms are not required for individual flats. It can only be commissioned by the owner of a building or the owner’s managing agents, not individual leaseholders. This is a significant problem, as the cost to rectify issues for a single flat could be as much as £50,000, normally charged through an increase in service charges.
As a result of the increased scrutiny, homeowners have experienced significant delays with the process leading to many individuals being unable to sell or re-mortgage their properties.
Housing Secretary Robert Jenrick said “I welcome the support we have received from RICS and the industry to resolve this matter and will be working urgently with lenders to resolve these challenges, ensuring that EWS1 forms are requested only where absolutely necessary and that the number of surveyors able to complete them is increased urgently to meet demand.”
The government has also committed to training 2,000 more building assessors to accelerate valuations. “This increased capacity will help speed up the assessment of properties necessary to ensure valuers can give appropriate advice to purchasers and lenders and so reduce delays in transactions involving properties covered by the government’s guidance,” RICS said.
It is hoped that the backlog of properties will decrease as the Government attempts to develop a more proportionate approach and reduce the number of buildings where an EWS1 assessment is needed however, this won’t happen overnight. “The Government should provide necessary funding to ensure that all affected buildings are surveyed within the next 12 months, so residents are not forced to wait years before they are able to sell their properties or obtain new mortgages.”
Whilst this may be a step in the right direction, in all likelihood the announcement will not immediately clear the way for the thousands of leaseholders unable to sell their properties.
The Government is also exploring ways to address ongoing concerns around the availability of professional indemnity insurance and welcomes industry’s progress on developing a portal where lenders, valuers and leaseholders will be able to find out if their building already has an existing EWS1, thereby reducing the demand for duplicate forms.
The Government has acknowledged that there is more work to do.
For more information on this article contact Dilan Yavuz by email on dyavuz@jpclaw.co.uk or telephone on 020 7581 7502 or connect with her on LinkedIn.
