Housing minister Christopher Pincher (pictured) said guidance issued by the Ministry of Housing, Communities and Local Government (MHCLG) in January on multi-storey building safety should not be used for valuations.
He made the comments in response to a written question from Labour MP for Poplar and Limehouse Apsana Begum asking what discussions had taken place with mortgage lenders on the valuation of properties with potential fire safety issues.
Pincher said: “The January 2020 Advice for Building Owners of Multi-storey, Multi-occupied Residential Buildings, was written for building owners to ensure the safety of their buildings. It was not designed to be used for valuation purposes.
“The EWS1 process was designed by the Royal Institution of Chartered Surveyors (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.”
However, the comments clash with those from leader of the House of Commons Jacob Rees-Mogg, who admitted people in buildings lower than 18m in height had often been excluded from government measures to tackle dangerous cladding.
Extended risk to all buildings
The January advice for building owners of multi-storey, multi-occupied residential buildings publication extends guidance previously issued on buildings over 18m tall to all residential buildings.
As a result, mortgage lenders have protested they must ensure that all buildings are safe for residents and for them to understand the risk they are lending on.
This has led to extended use of the Exterior Wall Survey (EWS1) form to assess the risk of external cladding on more buildings than originally intended and is causing significant hold-ups of months or even years due to a shortage of fire safety inspectors.
The guidance, which extended the work on building safety following the Grenfell Tower disaster in June 2017, said: “The risk of external fire spread should be considered as part of the fire risk assessment for all residential buildings, irrespective of height.
“The fire risk assessment should take in to account height, materials, vulnerability of residents, location of escape routes, and the complexity of the building.
“The explicit remediation advice provided in this advice note should be used to support the fire risk assessment and remedial actions may be required in buildings below 18m where there is a risk to the health and safety of residents, other building users, people in the proximity of the building, or firefighters.”
RICS has confirmed it is reviewing the EWS1 form guidance it issues.
And as Mortgage Solutions reported earlier this month, Pincher has confirmed discussions with lenders are taking place to find a “more proportionate approach” to valuing multi-storey properties.
Lenders need clarification from MHCLG
MHCLG has publicly criticised lenders regularly in written answers on the issue but has failed to back up claims or acknowledge any role in the situation.
On several occasions the housing minister has stated some lenders are not using EWS1 forms, but when questioned by Mortgage Solutions MHCLG refused to name those lenders.
The minister has also stated there have been meetings with lenders and other representative bodies on the issue regularly with separate ones involving the fire safety minister Lord Greenhalgh, but has failed to give details of those meetings.
In a joint statement given to Mortgage Solutions earlier this month, UK Finance and the Building Societies Association said: “Lenders are acutely aware of the impact that the safety issues related to cladding are causing for some homeowners and continue to collaborate with multiple market actors in pursuit of the best solution for customers.
“It’s essential that safety risks to homeowners are addressed while balancing the affordability of remediation measures that may become necessary in accordance with government guidance.
“However, it is only by assessing and fixing buildings which the government advice says are at risk that we can ultimately resolve fire safety concerns.
“Lenders are keen to see reduced demand for EWS assessments where appropriate to ensure attention is focused on higher-risk buildings. Key to this will be clarification of the government’s advice note to building owners, to support a more proportionate approach by valuers and lenders.”