In a letter to housing secretary Robert Jenrick, Betts wrote: “We have been contacted by leaseholders who find themselves in a situation whereby they cannot sell or mortgage their homes, because mortgage lenders are insisting on a EWS1 form despite their properties not meeting criteria as set out in the new Royal Institution of Chartered Surveyors (RICS) guidance.”
In March, RICS issued guidance detailing the properties which would need a form to declare their cladding status, as it found banks were requesting the document for more properties than expected.
At the time, the body said the criteria would help “to unlock the market.”
Betts continued: “Some of these leaseholders are stuck in a Catch 22 situation because the freeholder, with whom the decision about whether to seek the form rests, is saying the form is not necessary.
“It will not be helping to unlock the flat market, which the revised guidance is intended to do.”
He asked the government to explain how it was supporting implementation of the new guidance. He also asked what action would be taken against lenders who insisted on forms for properties not included in the RICS criteria.
EWS1 form fail
Betts said: “As it stands the EWS1 system simply isn’t working. Industry guidance has set out which buildings don’t need the form, but it seems lenders are ignoring this and are opting not to provide finance without it.
“As ever, it is the leaseholder left facing the consequences, trapped in homes they cannot sell or remortgage.”
“We need to hear urgently about what the government plans to do about this,” he added.
Majority following guidance
An MHCLG spokesperson responding to the publication of the letter, saying: “Most major lenders, representing roughly 80 per cent of the mortgage market, have said that they will adopt the RICS guidance or take a markedly less risk-averse approach.
“The updated EWS1 guidance from RICS means nearly 500,000 leaseholders should no longer need a form to sell their homes – and we continue to encourage a sensible, proportionate approach to risk.
“The EWS1 is not a government form, legal requirement or a building safety certificate and we’re disappointed if it is still being asked for in some cases where it’s not necessary.”