New cladding guidance announced

The Royal Institution of Chartered Surveyors (RICS) has issued new guidance to lenders which will ultimately lessen the number of wall safety surveys taking place on blocks of flats.

The guidance issued clarifies to banks and building societies which properties require valuers to complete an EWS1 form and which do not. RICS’ aim is to help lenders save time when the inspections are not needed, thus, unlocking the sales of flats with cladding quicker.

RICS guidance states that:

For buildings over six storeys an EWS1 form should be required where:

-There is cladding or curtain wall glazing on the building; or

-There are balconies which stack vertically above each other and either both the balustrades and decking are constructed with combustible materials (e.g. timber) or the decking is constructed with combustible materials and the balconies are directly linked by combustible material.

For buildings of five or six storeys an EWS1 form should be required where there are either:

-A significant amount of cladding on the building (for the purpose of this guidance, approximately one quarter of the whole elevation estimated from what is visible standing at ground level is a significant amount);

-Aluminium composite material, metal composite materials or high-pressure laminate panels on the building; or

-Balconies which stack vertically above each other and either both the balustrades and decking are constructed with combustible materials (eg timber), or the decking is constructed with combustible materials and the balconies are directly linked by combustible materials.

For buildings of four storeys or fewer an EWS1 form should be required where:

There are ACM, MCM or HPL panels on the building.

Ben Elder, RICS’ head of valuation standards, said:

“This guidance provides a framework for consistency across the mortgage valuation sector as to when an EWS1 form is required.

“We are pleased to see, from the consultation responses, that many believe that the guidance will reduce the number of EWS1 forms requested.

“We have reached our final position following very careful consideration of the evidence to ensure that buildings at higher risk of remediation work are appropriately investigated in the valuation process, to support reliable advice by valuers to their lender clients.

“With the majority of lenders in support of the guidance, we now call on all UK lenders to support the guidance and work with their valuation providers to implement.”

RICS’ standards and regulation board chair Dame Janet Paraskeva said:

“We recognise the significant distress caused to leaseholders struggling to sell flats in blocks with external cladding.

“This announcement is a crucial step in unlocking the market, by ensuring that only those buildings where there are risks of costly remediation as a result of safety concerns from cladding are subject to additional checks.

“The guidance is anticipated to result in a reduction in the number of EWS1 requests which will therefore allow more focus on the assessments of higher risk buildings, which should speed up the overall process whilst ensuring appropriate protection for lenders and purchasers.”

Housing secretary Robert Jenrick MP said:

“I welcome Rics new guidance which will mean nearly 500,000 leaseholders will no longer need an EWS1 form – helping homeowners to sell or remortgage more quickly and easily.”

UK Finance and the Building Societies Association have also welcomed the guidance. In a joint statement they said:

“Government confirmation that it supports the guidance produced by Rics as an appropriate, risk-based and proportionate basis on which to proceed with valuation assessments, in line with the building safety Consolidated Advice Note published in January 2020 is also a welcome and necessary step for lenders.

“We anticipate that many lenders will implement this guidance, which should see the number of EWS1 requests fall. However, this is a decision for each lender to make based on their own risk appetite.

“Those buying a flat should understand that a decision made by a valuer not to require an EWS1 inspection under the new guidance is no guarantee that fire safety remediation works will not be required in the future.”

LaSalle Investment Management has announced themselves as the first institutional investment landlord in the UK to complete re-cladding at a cost in excess of £6 million. Waterside Apartments in Leeds, a BTR development, comprising 183 units of 1, 2 & 3 bedroom apartments available to rent, identified aluminium composite material (ACM) panels from its original construction in 2005, following the nationwide review after the Grenfell Tower tragedy.

RICS have published a Cladding External Wall System (EWS) FAQs here.

1 Comment

  • test

    I am trying to sell a property with no cladding, no glass curtains and no balcony in fact there are no balconies on the block and Halifax are making things very very very difficult for the sale, insisting on the need of a EWS1 when there are no reasonable grounds. These guidelines are still at the discretion of Halifax but unfair.

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