THE GOVERNMENT said that flat owners in buildings without cladding ‘will no longer need’ external wall fire review (EWS1) forms to sell or remortgage properties.
Last month, Prime Minister Boris Johnson revealed in parliament that a reassessment of the form was being undertaken by the Royal Institution of Chartered Surveyors (RICS), after the news earlier this year that the housing, communities and local government committee (HCLGC) had branded the EWS1 form ‘slow and expensive’, and asked for the government to step in.
This was not only because the process was ‘not working’, but it should create a ‘faster and fairer’ system, because the ‘industry-designed’ form was ‘slow and expensive’ and ‘applied to an unnecessarily wide range of buildings’. The form, introduced last December, aimed to ‘create a standardised process that would make it easier for brokers and homeowners to find suitable mortgages’.
A valuer could request it from a building owner or representative, and require a building professional ‘confirm that the actual material on the walls posed a limited risk or was non-combustible’. Should it contain materials that ‘posed a significant fire risk’, a ‘detailed description of what was needed to fix it had to be issued’, but lenders began rejecting mortgage applications.
This was because of ‘outstanding cladding inspections trapping borrowers with their current providers’, and so applications were being cancelled due to inspection requests being delayed. As a result of the aforementioned government advice ‘a much larger number of buildings’ fell into scope ‘than had been envisaged’, and the process ‘lacked sufficient input from leaseholder representatives, but also other important stakeholders, including the insurance industry’.
RICS urged the government ‘to take greater ownership of the situation’, and Minister for Fire and Building Safety Lord Greenhalgh held talks (https://www.thefpa.co.uk/news/news/news_detail.government-holds-talks-over-ews1-form.html) with RICS to ‘attempt to resolve confusion’, before Housing Minister Christopher Pincher stated mortgage lenders are reviewing how the forms are used, though some residents have been told by housing associations that they ‘cannot produce’ the form for possibly ‘several years’.
Mr Pincher later admitted that there are ‘fewer than 300’ qualified chartered fire engineers to undertake the surveys. Residents have complained publicly including Wisteria Apartments in London, tenants of One Housing properties in London and Slough, residents of Zenith Close in London, a resident in Hackney and a landlord in Twickenham.
In late August, Which? revealed that leaseholders are ‘being duped into paying thousands’ to fraudsters using fake EWS1 forms, with the government notified, and the growing crisis has seen mortgage brokers report ‘delays and scuppered plans’ for their clients. A survey of leaseholders found that ‘nearly nine in 10’ or 89% who have received EWS1 checks have been told their buildings require remediation work.
Last month, it was discovered that the EWS1 form for Marseilles House at Century Wharf in Cardiff was fake, with a surveyor confirming that she ‘had not carried out the survey or signed the form’, and ‘was horrified that the survey took place with her signature’. The company hired to conduct the survey said it ‘only produces a report’ signed off by a third party chartered surveyor for £200, and ‘had also been the victim of fraud’.
That company – Specialist Facade Inspections (SFI) - withdrew every certificate containing the false signature, reviewed each case and reissued each certificate, but was reported later to have provided ‘at least 15 more’ forged certificates – and its new certificates also have signatures ‘from someone apparently not currently registered to sign the forms’.
More recently, the Fire Industry Association launched a portal that will ‘provide a central readily-accessible location for EWS1 forms’ and allow fire engineers to complete forms online, and the Financial Conduct Authority (FCA) reported that the government and banks are working on a more ‘risk-based’ approach to assessing properties with cladding.
Most recently, Mr Pincher ‘refused to acknowledge’ any role in the issues stemming from government guidance, stating that the Advice for Building Owners of Multi-storey, Multi-occupied Residential Buildings guidance – released in January – ‘was written for building owners to ensure the safety of their buildings. It was not designed to be used for valuation purposes’.
He added that the process ‘was designed by’ RICS ‘to address lender concerns about cladding in high-rise residential buildings, but industry has applied it more widely than it was intended. Government does not support a blanket use of EWS1. The building safety minister has met with mortgage lenders seeking their support to a more proportionate approach to valuation of multi storey, multi-occupied residential buildings’.
The government has now announced it will help homeowners ‘caught up’ in the crisis by ensuring that owners of flats in buildings without cladding ‘will no longer need an EWS1 form to sell or remortgage their property’, a move ‘set to benefit’ around 450,000 homeowners. This came as part of an agreement reached between the government, RICS, UK Finance and the Building Societies Association (BSA).
It added that the announcement was ‘part of a wider government-led solution to support those homeowners who have unsafe cladding on their buildings and where there is still more to do’, as the EWS1 process had been applied to buildings without cladding, ‘stopping some people from selling or moving home and causing unnecessary anxiety for homeowners’.
Housing Secretary Robert Jenrick and RICS agreed that those without cladding do not need an EWS1 form, and while building owners are ‘legally required to undertake fire risk assessments on all blocks of flats’, new guidance from the government will see RICS working with lenders, valuers and fire safety bodies to develop new advice for surveyors, enabling them to ‘take a more proportionate approach and reduce the number of buildings where an EWS1 assessment is needed’.
It also announced it will provide funding for and work alongside RICS to provide training of more assessors, ‘speeding up the valuation process’ where an EWS1 form is required. The government is also exploring ways to address ‘ongoing concerns’ around availability of professional indemnity insurance, and welcomed the FIA’s progress in creating its portal.
Mr Jenrick said: ‘Through no fault of their own,?some flat-owners have been unable to sell or re-mortgage their homes?-?and this cannot be allowed to continue. That’s why?the?government has?secured agreement that the EWS1 form will not be needed on buildings where there is no cladding; providing certainty for the almost 450,000 homeowners who may have felt stuck in limbo.
‘However, this is only part of a wider solution and we continue to support those homeowners who do have cladding on their buildings and where there is still more to do. I welcome the support we have received from RICS and 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.’
RICS chief executive officer Sean Tompkins added: ‘We are aware of the severe impact this has had on some homeowners and we agree that buildings without cladding should not be subject to the process. We will be taking forward work with industry on this.
‘Further, we recognise the acute market shortage of fire engineers to carry out EWS1 assessments and welcome the government’s support on working with us to upskill other regulated professions, such as Chartered Building Surveyors, to create additional capacity in the market.
BBC News reported however that UK Finance and the BSA said that ‘did not consent’ to being part of an announcement by Lord Greenhalgh, which said that their chairman and chief executive had confirmed EWS1 forms ‘are not and have never been required’ for buildings without cladding. A finance industry source also said that the proposal ‘did not mean properties with issues other than cladding would automatically be exempt’ from an EWS1 survey.
The source added that buildings with wooden balconies and other issue ‘should have been included among those which still required’ external fire safety checks, and it would still depend on the decision of a ‘suitably qualified, independent and properly insured surveyor’, while they ‘did not recognise’ the 450,000 figure. The UK Cladding Action Group also pointed out that only a ‘small subset’ of buildings would benefit.