21 Nov 2020
Yesterday, MHCLG announced they have been working with RICS, UK Finance and the Building Societies Association, so that owners of flats in buildings without cladding will no longer need an EWS1 form to sell or re-mortgage their property. Also, there will be an effort to accredit more engineers to inspect buildings and to provide those engineers with insurance.
For the avoidance of doubt, we do not see this as changing the Government’s advice in the consolidated advice note ‘Advice for Building Owners of Multi-storey, Multi-occupied Residential Buildings’, issued back in January 2020.
Insofar as it brings clarity for buildings without cladding, the new guidance on EWS1 forms is to be welcomed. That said, the EWS1 form was never intended to be sought on every block of flats, but on those with an ‘external wall system’, i.e. some form of cladding. To some extent therefore, the new guidance is simply clarifying when EWS1s should be requested. Clarity is helpful, though we wait for further details, such as the position on flammable materials on balconies.
The enthusiastic use of the form was due, in part, to the reality that a mortgage valuer cannot be expected to determine the precise nature of construction of many blocks (and may not be insured to comment); thus the form was sometimes requested on a rather precautionary basis. In fairness to valuers, we remind ourselves that a mortgage valuation is not a survey, but simply an assessment of value for mortgage purposes.
Going forward and all being well, the volume of EWS1 requests should reduce, provided valuers and lenders are comfortable to identify buildings without cladding. This announcement is unlikely to change matters for buildings with cladding, save that fewer EWS1 requests hopefully will allow the small pool of cladding assessors to focus on buildings with issues.
Also welcome is government has heeded our advice on accrediting more engineers to inspect suspect external wall systems. Five months ago, on the 17th June, we wrote a letter of concern to MHCLG saying
“…we need more engineers, with insurance. This is a Nightingale Hospital situation. A pulse of intense work needs to happen very quickly by many skilled people on a task and finish basis [to get buildings checked asap]. There are plenty of skilled engineers and surveyors out there who know construction very well and who could be refocussed very quickly (a few weeks) to complete EWS1 inspections and forms. They need to go through a common accreditation process and be insured.” We added “Government needs to solve the insurance position for fire risk/wall inspectors.”
Five months on, we are pleased to hear this advice, which has been repeated by other stakeholders, has been acted on. We would have preferred to see this delivered sooner, as it would have helped to prioritise the allocation of government funding for the remediation of buildings, according to risk to life rather than on the present first come – first served basis. But progress is progress, and we are pleased to see it.
Once again, however, there is a ‘however’. Government has not yet cracked the professional indemnity insurance (PII) nut for these assessors and without PII (or being exempted from risk), they will not be able to work. We hope the current efforts by Government to solve the PII issue bear fruit quickly – it is not an easy problem to solve unless Government itself steps in as an underwriter in some way.
Readers interested in how Government reached their conclusions, which includes s some quite broad assumptions, can enjoy more detail here.