Lenders denounce latest cladding offer

Posted in November 2020

Lenders across the UK have denounced the latest government initiative to solve the current EWS1 cladding crisis by excluding 400,000 flats, saying that 'it doesn't really solve anything'. 

Lenders denounce latest cladding offer
The government have announced that owners of over 400,000 flats in buildings without cladding would no longer be required to provide an EWS1 certificate, which is needed to either sell or secure a new mortgage. This 'External Wall System' paperwork has up until now, been necessary to prove that a flat in a block taller than 11 metres is safe and not a fire hazard. 

The Housing Secretary Robert Jenrick, believes this new deal is a victory for those who have been campaigning against the unfairness of the current legal requirement for an EWS1 certificate that has left many people trapped in homes they are unable to sell. 

Jenrick said 'I am pleased to announce that the government has now secured agreement that the EWS1 form will not be needed on buildings where there is no cladding, providing certainty for almost 450,000 homeowners. who may have felt stuck in limbo' 
He also claimed that those living in towers without cladding will not have to produce an ESW1 form in order to remortgage or sell their property, claiming it had the backing of RICS, UK Finance and the Building Societies Association.
However, although the RICS backed the deal, the BSA (Building Societies Association) and UK Finance who collectively represent over 250 banking and finance firms and 43 UK building societies, did not agree to being named in this latest government statement and have made the following announcement:-

“Lenders sympathise with the impact that the safety issues related to cladding are causing some homeowners. Borrowers and lenders have a common interest in ensuring that their flat is a safe place to live. Lenders will rightly support surveyors carrying out whatever steps are needed to provide that assurance where there is doubt or concern about a block’s construction.

“We welcome the announcement of the training and guidance for valuers that will deliver more assessors, and the work to ensure that these assessors have the necessary professional indemnity insurance. In time, this will enable a more proportionate approach which will ensure attention is focused on higher-risk buildings. Lenders’ objective is to ensure the safety of all, whilst enabling a normally functioning market.

“In practical terms, with the exception of a few occasions where they were demanded in error, which have since been rectified, an EWS1 form has never been required for a building without any form of cladding or a combustible wooden balcony.

“However, there are buildings which may look as though they are solid brick built, but are in fact clad with unknown materials behind the brick. We will continue to work with Government and RICS in pursuit of the best solution for customers in relation to these.”

NAEA Propertymark has nevertheless, welcomed Jenrick’s announcement, saying: “The requirement for an EWS1 form has delayed or caused sales to fall through, as flat owners have had to depend on their freeholder to commission the work and so few buildings have the form already.”

The Ministry of Housing, Communities and Local Government will also be providing £700,000 to train more building assessors, which should hopefully speed up the valuation process for homeowners requiring an EWS1 certificate by creating 2,000 new assessors within 6 months. The (MHCLG) has also stated that while building owners are already required to undertake fire risk assessments on all blocks of flats, following supplementary guidance published by the Government over the weekend, RICS will be working with lenders, valuers and fire safety bodies to develop new advice for surveyors.

This will enable surveyors to take a more ‘proportionate approach’ and reduce the number of buildings where an EWS1 assessment is needed.

However, as it currently stands, 9 out of 10 buildings have failed to pass the EWS1 safety checks, which leads to leaseholders having to pay to fix cladding, balconies, insulation and wall structures at a cost of £75,000.

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