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Cladding review enables ‘valuers to make a valuation and lenders to make a lending decision’

by: Matthew Jupp, principal for mortgages at UK Finance and Charlie Blagbrough, policy manager at the Building Societies Association BSA
  • 16/12/2019
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Cladding review enables ‘valuers to make a valuation and lenders to make a lending decision’
Anyone reading these pages in recent months will have seen the stories about homeowners struggling to sell their property because they live in a high-rise block with cladding on it.


In the wake of the horrendous fire at Grenfell Tower there was an urgent government review of buildings across the country to identify those with dangerous aluminium composite material (ACM) on them.

Over 400 were found and work is, or will be, underway to remove and replace it on many of these – although there are still questions over how it will be paid for in some private residential buildings.

Before long though thoughts had turned to other types of cladding that could, potentially, be combustible and need to be replaced.

The government is currently testing a wide range of materials and combinations of materials, and we hope its overdue report will be out in the New Year.

But it has left valuers and lenders trying to find answers.


Key questions

Does a building have cladding on it? What material is it made of? What other materials, like insulation, are behind it? How is it attached to the wall? Was the workmanship up to scratch?

Without the answers to these questions from someone who knows what they are talking about valuers are reluctant to provide a valuation of a property and lenders are cautious about lending.

They needed to be sure that they were not providing a mortgage to someone buying a building that is unsafe, potentially with a large bill coming down the tracks for remediation work.

It isn’t an issue that any single sector can solve alone.

Working in conjunction with UK Finance and the BSA, the Royal Institution of Chartered Surveyors (RICS) led a series of roundtables and discussions with a wide range of stakeholders to find a way forward: building owners and developers, social housing representatives, building management agents, fire safety experts, lenders, and valuers all came together to find a solution.


A single process

Thinking coalesced around a single assessment process with an agreed way of recording it.

An early draft of a standard form from Fiona Haggett at Barclays was reviewed, reworked and revised until we had the External Wall System (EWS) form, published today.

This is a one-page form that a valuer can request from a building owner or representative that will require a professional with building expertise to confirm that the actual material on the walls is of limited or non-combustibility.

Or, if it is combustible, a fire engineer or similar expert will make a detailed analysis of what, if any, work is needed.

It will enable valuers to make a valuation and lenders to make a lending decision.

One form per building will be required and it will have a five-year life span which means it can be used across multiple purchases and remortgages.

This is by no means the culmination of our work on cladding but it is a step forward and in the coming weeks and months we hope that both brokers trying to find suitable mortgages for homeowners and homebuyers will find it easier to do so.


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