The pros and cons
Since the Grenfell disaster which tragically saw 72 people lose their lives, hundreds of thousands of homeowners have effectively been trapped within their properties. Concerns over safety and the potential cost of remedial works have brought many property transactions to a halt.
The recent changes announced should finally bring an end to the years of distress caused to flat owners that have been prevented from selling or re-mortgaging their homes.
Housing secretary Robert Jenrick announced that the Government will provide an additional 3.5bn fund to assist in the removal of unsafe cladding in buildings over 18 metres high. Clarity is still needed for those buildings under 18 meters as they have not been included in the overall guidance.
As the funds do not stretch to cover the cost of low rise buildings, the government have backed a loan to cover the cost of the works, in which repayments will be capped at a maximum of £50.00 per month, however MP’s have labelled the plans “a betrayal of millions of leaseholders”.
It has been criticised by many that the lack of urgency with regards to the removal of cladding has been unacceptable. Essentially, many people have been trapped living in hazardous buildings for several years, unable to sell nor find a way forward.
Lending on a death trap
The EWS1 process was created and developed by UK Finance, the BSA (Building Societies Association), and RIC’s to help mortgage providers assess the risk when it comes to lending on these types of properties. The EWS process involves a fire safety assessment by a suitably qualified professional who completes the EWS1 form. Full information can be found on the RICS website.
For the EWS1 form to be signed off, the expert carrying out the required checks must ensure that the wall structures, balconies, insulation and cladding all comply. Flat owners have been personally liable to pay to have the defects corrected, which can cost tens of thousands of pounds. One block of flats in Manchester saw their bill reach as high as £115,000.00.
Who can carry out these checks?
An EWS1 can only be commissioned by the Freeholder, or in a block of Flats run by the leaseholders, the Residents Management Company. As an individual leaseholder who does not own the building, you would be unable to organise the survey. Some landlords have refused to get EWS1 Forms for low-rise blocks and limited rights are available to force the landlord to carry out cladding remediation work.
Once the Landlord has agreed to the survey, they will then instruct a RICS registered expert or the Institution of Fire Engineers to carry out the necessary checks. However, the professional carrying out the assessment must have public liability insurance. The difficulty in obtaining the required cover has proven to be a major barrier at present.
Hope for PII
It has recently been announced that the Government is to create a Professional Indemnity Insurance scheme to support surveyors as the insurance is incredibly hard to secure. While only 300 assessors are qualified to undertake the review and with thousands of properties at risk, the delay has been prolonged.
The Ministry of Housing, Communities and Local Government (MHCLG) has announced the move alongside the funding to be distributed for the removal of cladding. The state-backed scheme is designed to break down the major roadblock that has been preventing professionals from obtaining the required insurance.
A welcomed step forward
The Royal Institution of Chartered Surveyors (RICS) have provided guidance for the External Wall Survey forms, allowing for a mass number of buildings to be removed from the current scope and targeting the most at risk buildings to swiftly identify unsafe buildings in need of those crucial repairs.
The guidance is to provide further consistency to a valuer carrying out a mortgage valuation on a property with cladding, and identify whether an EWS1 should be requested before proceeding.
The main proposals to come from their review are focusing on the height and combustible materials used in the construction of the property:
- Buildings of four storeys or less – If they are without aluminium (ACM) or metal (MCM) composite material will not require an EWS1 assessment
- Buildings of five to six storeys – If they are without ACM and MCM, they will not require an EWS1 if less than a quarter of the surface area is clad
- Buildings of six storeys or more – An EWS1 will not be required if there is no cladding or curtain wall glazing on the buildings, and as long as the balcony restrictions are met.
