Minister refuses to rule out compulsory building purchases to fix flammable cladding

Minister refuses to rule out compulsory building purchases to fix flammable cladding

 

Housing minister Christopher Pincher (pictured) confirmed the government was open to all options, potentially including compulsory purchases, to solve the issue.

While government funds have been made available for public and privately-owned buildings to help with the removal of dangerous cladding, many property owners are refusing to engage in the process.

This can be particularly difficult to enforce where the building is owned through an offshore company.

Failing to deal with the cladding leaves residents vulnerable to the risk of fire disasters such as that at Grenfell, and also often means leaseholders are unable to sell their properties, leaving them stuck in their homes.

Pincher was responding to a written question from Conservative MP for Hendon Matthew Offord, who asked for an assessment “of the potential merits of using compulsory purchase orders on freeholders who refuse to engage in the removal of combustible cladding”.

Pincher replied: “The government’s focus has been to ensure that remediation of unsafe cladding happens as quickly as possible.

“We engage with local enforcement authorities, including local authorities and fire and rescue services, on the routes they assess would be most effective to ensure resident safety and support them to take action where remediation is yet to start on site.

“While we would not rule out any option, to date we have focussed on funding, provision of construction support and enforcement powers to increase the pace of remediation.”

Yesterday Mortgage Solutions reported that the Royal Institution of Chartered Surveyors (RICS) is reviewing the External Wall Survey (EWS1) process it developed with lenders to assess whether buildings remain a fire safety risk.

 

EWS1 cladding form guidance being reviewed by RICS

EWS1 cladding form guidance being reviewed by RICS

 

Prime minister Boris Johnson revealed the body had a “risk matrix” in the works to support the valuation of buildings under 18 metres during the Prime Minister’s Questions session on Wednesday. 

This was in response to Matthew Offord, Conservative MP for Hendon, who said he found that advice issued by the Ministry of Housing, Communities and Local Government (MHCLG) regarding unsafe cladding had also been extended to properties under 18 metres 

Offord asked if this meant there would be any specific advice for shorter buildings. 

Johnson said buildings over 18 metres were being prioritised but added: “I understand that the Royal Institution of Chartered Surveyors is producing a risk matrix to support mortgage valuation under 18 metres, and that, led by the National Fire Chiefs Council, a risk prioritisation tool for blocks of flats will be available shortly.” 

A spokesperson for RICS said: “We are working on a review of EWS1 and guidance generally with a range of industry stakeholders.  

“Any changes made as a result of that review will still have to follow the most up to date government advice.” 

 

Building safety fund 

Offord also asked if the building safety fund to pay for works to remove unsafe cladding from residential buildings would cover properties under 18 metres. 

Johnson said he would “look at” the possibility of extending the fund tthese properties. 

The fund, which was increased to £1.6bn in May, is available to building owners in the private and social sector.

 

Coordinated effort needed on cladding as borrowers face years in limbo – Ganatra

Coordinated effort needed on cladding as borrowers face years in limbo – Ganatra

 

In the wake of the Grenfell disaster, surveyors acting for mortgage lenders are making extra checks to ensure a building’s construction is safe.

Many are asking for evidence of an external wall survey, which comes in the form of an EWS1 certificate.

It was first designed for flats in high-rise blocks, typically at least six storeys, but in January, ministers said fire safety should be considered on all blocks, irrespective of height.

And borrowers are increasingly finding that their building does not have one.

The situation has created a new wave of mortgage prisoners for people who are living in flats who are stuck with their existing lender.

If they do not agree a new mortgage deal with their existing lender, they will revert onto the standard variable rate (SVR) which will see their monthly repayments rocket to potentially unaffordable levels.

 

Stuck on the SVR

The average standard variable rate is around 4.7 per cent – far greater than the best deals available today at less than two per cent for a two-year fix.

To give context to the problem, we have been trying to assist a client whose Sainsbury’s Bank fixed rate mortgage product was coming to an end on 30 September.

She approached us in good time to start the process of exploring remortgage options and to compare what she has been offered by her current lender against what is available in the market.

Having gone through the initial know your customer requirements we chose to place her mortgage with Coventry Building Society, whose offering was more competitive.

However, upon submission of the application we received notification to say that that an EWS1 on the building would be required in order for the case to progress forward.

Our client approached the management company to request this and despite the investigatory work being started on the building which confirmed there was no aluminium composite material (ACM) or high-pressure laminate (HPL) cladding the management company was unable to provide timescales on when the report will be issued.

Our client now sits on the SVR and is at the mercy of others despite her building not being over 18m tall.

 

Wait for work could be years

There are likely to many borrowers who are in the same position as some of our clients that are unable to take advantage of competitive mortgage rates offered by rival lenders because of the prerequisite need to have an EWS1.

The problems, however, go beyond those homeowners who cannot get access to the correct paperwork.

There have been instances where even though the mortgage client has received their EWS1 certificate, it came with remedial work being required and so lenders are not willing to lend – or remortgage – until that work has been completed.

The wait for the work to be done could be years depending on the size of the building.

 

Coordinated effort needed

In my view UK Finance must apply pressure on banks to ensure they allow a degree of flexibility when it comes to assessing applications which require the EWS1 forms.

The situation hasn’t been helped by the facts that due to lockdown and huge backlogs with the fire risk assessors obtaining these reports isn’t a quick process.

RICS also has a crucial role to play by giving guidance allowing mortgage valuers to be able to provide a broad opinion to the lender on their suitability.

The valuers are concerned about protecting themselves from being held accountable in the event they sign off lending then the building goes into flames.

The government needs to look at giving a moratorium period otherwise mortgagees stand to be the ones bearing the brunt.

While homeowners are having to pay over the odds for their mortgage, the problem also means they are unable to sell their home, because any new owner would not be able to secure a mortgage. The impact is significant for the wider housing market as those unable to sell their flats are blocking what needs to be a fluid market.

 

How widespread is the problem?

Some 457 high-rise buildings over 18m have been identified in England as having ACM, which is the same type of cladding that was mounted onto Grenfell Tower.

Official figures from the Ministry of Housing published in June state that 300 of those buildings are still waiting to be made safe.

Some £1.6bn has been pledged by the Ministry of Housing, Communities and Local Government to speed up the replacement of the unsafe cladding.

However, the funds only cover buildings more than 18m tall.

Yet many other blocks are still covered in potentially unsafe materials – many with no sign of important remedial works taking place.

 

Borrowers bearing the cost

The Housing, Communities and Local Government Committee, an influential group of MPs, has called on the government to intervene, but warned that repairing the 2,000 properties that have combustible cladding could cost £15bn.

Regardless of height, safety tests must be carried out by a qualified engineer who assesses the walls and then declares the building safe – or otherwise.

There have been concerns that part of the delay in getting the paperwork is due to a shortage of engineers.

According to the Institution of Fire Engineers there are only around 290 qualified experts able to carry out investigations of external wall systems (including cladding, insulation and fire-stopping).

This could lead to waiting times of months and even years for some.

While the wrangling continues mortgagees are bearing the cost.

 

Majority of applications for government cladding removal fund rejected

Majority of applications for government cladding removal fund rejected

 

More than 2,700 applications have been received so far for the £1bn Building Safety Fund launched in July which will be used to remove unsafe non-aluminium composite material (non-ACM) cladding from buildings more than 18 meters high.

But by 25 September just 138 decisions had been made by the Ministry of Housing, Communities and Local Government (MHCLG), according to its first set of data.

Fewer than half of these have been accepted for funding by the department, with 73 being rejected and withdrawn.

The vast number of applications received since the fund opened on 31 July illustrates the scale of the issue facing the nation from tower blocks with potentially unsafe cladding.

A separate fund has also been established for removing unsafe ACM cladding which was the type involved in the Grenfell Tower tragedy.

 

Majority of assessments declined

In total 2,784 applications were received but 1,709 did not have the basic information to assess if they were eligible, 628 provided some but not enough information to assess eligibility, while 447 are being assessed.

“The eligibility of buildings is assessed against if they have unsafe cladding, the height of the building and if leaseholders are present in the building,” the MHCLG data noted.

“The department does not intend to publish a building by building list of decisions and their rationale.

“These are communicated to registrants who we expect will ensure that their residents are kept fully informed.”

 

Safety certificates blocking movers

The issue of cladding and other fire risk materials has severely impacted people trying to buy and sell properties in high rise buildings.

With limited numbers of registered fire safety assessors available to assess buildings, it is estimated thousands of people have been stuck in their properties unable to move until they get a safety certificate which can be accepted by lenders.

In the March 2020 budget, the government announced it will provide £1bn in 2020 to 2021 to support the remediation of unsafe non-ACM cladding system on residential buildings 18 metres and over in both the private and social housing sectors.

In 2019 it released around £200m to remove and replace unsafe aluminium composite material cladding from around 170 privately owned high-rise buildings after private building owners failed to take action and tried to offload costs onto leaseholders.

 

Building owners must step up

An MHCLG spokeswoman told Mortgage Solutions the department was disappointed that building owners were not up to speed with the required information.

“Our priority is making homes safer, more quickly, which is why we’re providing £1bn to speed up the removal of unsafe non-ACM cladding through our Building Safety Fund,” she said.

“We are already working to progress eligible applicants to the fund to the next stage – so we can begin the remediation process as quickly as possible.

“It’s disappointing so many building owners – who are responsible for making sure their buildings are safe – have been unable to provide the basic information we need to progress and we urge them to do so as quickly as possible.”

It is understood that work is complete or under way in more than 70 per cent of buildings with ACM cladding, with this figure rising to more than 90 per cent in the social housing sector.

The government also emphasised that building owners should meet the costs of the work without passing them on to leaseholders wherever possible.

 

 

Cladding victims renew calls for government solution

Cladding victims renew calls for government solution

Six months after the government announced funds to remove dangerous cladding from tower blocks, the groups say the current effort is failing and 700,000 people are living in dangerous conditions with no end in sight.

Up to 3.6 million people could face waiting as long as a decade to sell almost any modern flat because they cannot prove their walls are safe.

End Our Cladding Scandal campaign

The relaunched End Our Cladding Scandal campaign sets out 10 steps to fix the crisis, which has left about 200,000 high-rise homes wrapped in deadly materials and up to 1.5 million modern flats of all heights unable to sell or get a new mortgage.

Around the country, about 20,000 high-rise flats still have the same cladding as Grenfell Tower.

An estimated 186,000 flats in at least 2,957 tall developments are wrapped in other types of flammable materials, according to registrations for a £1bn government building safety fund obtained by The Sunday Times.

The figures exclude hundreds of thousands of medium-rise flats (below 18 metres) that are also thought to be affected.

National effort needed

The groups’ demands include calls for the government to lead an urgent national effort to remove all dangerous cladding from buildings by June 2022 and for funding to be provided upfront to all blocks, including social housing blocks.

It is an approach modelled on steps being taken in several Australian states, where the government would put up the money to fix buildings, but then take on the power to pursue those responsible through the courts and levy new developments to recoup its costs.

The new demands – launched yesterday in The Sunday Times – have been developed in consultation with specialist magazine Inside Housing and several lawyers representing families at the ongoing inquiry into the Grenfell Tower fire.

They are based on the recommendations of the cross-party Housing, Communities and Local Government select committee and have the backing of several large industry bodies, politicians from across the political spectrum, London mayor Sadiq Khan, and Labour shadow housing minister Andy Street. Celebrities such as TV presenter Kevin McCloud are also backing the campaign.

Grenfell United, a group of bereaved families and survivors from the fire, said: “It’s been three years since the fire that took the lives of our loved ones and neighbours. With this dangerous cladding still on buildings all it will take is a simple kitchen fire to cause another Grenfell. It could happen at any moment.  Only the government has the capacity to sort this mess out. They haven’t done enough and every month they stall they are willingly leaving thousands of people in danger. Rishi Sunak and Robert Jenrick need to step up and make this right.”

Not enough money

According to campaigners, the £1bn government fund will cover fewer than 600 of the 2,957 developments that have registered, leaving 2,375 with no recourse to remediation.

This is in addition to 291 out of a total of 458 tall buildings with the same aluminium composite material (ACM) cladding as used on Grenfell which are yet to complete remediation more than three years since the fire. Just 53 of these buildings completed remediation this year.

In the absence of government funding, costs for remediation often fall on leaseholders – with sums reaching more than £100,000 per flat in the worst cases.

Leaseholders are also often required to fund 24-hour waking watches and other interim measures, at costs of up to  £800 per month each, until their blocks are made safe.

Around the country up to 1.5 million modern flats are unsellable – even in three-storey blocks – because they cannot demonstrate the safety of their cladding, insulation, balconies and wall structure, a necessary requirement of gaining a mortgage due to government guidance.

Sadiq Khan, mayor of London, said: “The Grenfell Tower fire should have been the tragic wake-up call ministers needed to improve building safety. Instead, more than three years on, thousands of Londoners continue to live in unsafe accommodation, dealing with the stress and uncertainty of building owners dragging their feet and the government failing to take responsibility.

“I welcome the work carried out by the Housing, Communities and Local Government select committee and I’m proud to back Inside Housing’s campaign to end our cladding scandal.”

Ritu Saha, a founding member of the UK Cladding Action Group, said: “Grenfell has exposed terrible failings of the building safety regulatory regime in this country.

“Thousands of buildings are now deemed unsafe, with horrific mental and financial consequences for innocent leaseholders. Any decent government must put the safety of residents first. This government must act now or be responsible for another Grenfell.”

Giles Grover and Rebecca Fairclough, spokespeople for Manchester Cladiators, said: “The government has accepted that its building regulations have been ‘not fit for purpose’ for years but has chosen to only commit a fraction of the funds required to make our homes safe. This continued flawed approach to tackling this crisis has only increased the uncertainty our residents are suffering. The government must step up and put this right now.”

London mayor wants greater lender clarity over EWS1 forms as cladding ‘crisis’ drags on

London mayor wants greater lender clarity over EWS1 forms as cladding ‘crisis’ drags on

 

Writing to housing secretary Robert Jenrick, Khan said it was “unacceptable” that thousands of people’s lives were on hold while the market for leasehold flats had ground to a halt.

He demanded “greater clarity” on which buildings require an External Wall Survey (EWS1) form and for government to work with industry to publish guidance for lenders and leaseholders setting this out.

He said a replacement to the EWS1 form was needed and that the mental and financial health of residents was being severely affected.

Khan added that with an estimated 600,000 leaseholders nationwide currently in limbo, at the current rate it would “take years” to certify the buildings as safe.

The EWS1 form was launched at the end of 2019 to help lenders verify the safety of cladding attached to high rise buildings and solve the issue of nil valuations preventing lending.

However, the situation has proved difficult with a shortage of qualified surveyors and lenders using forms more widely than intended.

This has led to meetings with government officials to assess the situation and push lenders to review the position.

 

Resolving the crisis

In his letter earlier this week, Khan called for a major overhaul of the entire situation.

“The shortage of competent professionals to inspect the safety of external walls has resulted in severe delays and reports of fake EWS1 forms from unqualified sources, further adding to leaseholders’ stress and financial pressure.

“Exacerbating this issue is the large number of professionals who cannot access professional indemnity (PI) insurance for this work.

“Furthermore, there is insufficient government funding on offer to protect leaseholders from the financial burden of remediation costs if they are identified.”

He added: “To resolve this crisis, the dual objectives of ensuring buildings are safe and unlocking the market must both be pursued.

 

Five “urgent” key points were raised to solve the situation:

  1. The government must urgently find a long-term funding solution for external wall remediation which protects leaseholders, with government fully funding remediation costs where recovery from those responsible is not successful or possible.
  2. With the market unlocked, the need for EWS1 forms would be removed. A much more comprehensive method for tracking and enforcing building owners’ responsibility to inspect and remediate their external walls, including oversight and intervention, would be required.
  3. While the EWS1 form is still in use, greater clarity is needed on which buildings require an EWS1 form and which do not. The government should work with industry to publish guidance for lenders and leaseholders which sets this out.
  4. A training and accreditation programme should be created to vastly increase the number of competent professionals that can carry out safety inspections of external walls.
  5. Government must work with the insurers to ensure there are clear standards of professional competence to build confidence in providing appropriate PI cover for those with the appropriate qualifications and experience to work on external wall safety.

Khan concluded: “Taking action now is critical to ensure the safety of residents and to stop the devastating effects the EWS1 crisis is having.”

 

Government under pressure

The government has continued to face questions from MPs over its handling of the situation, with housing minister Christopher Pincher responding to several written questions this week.

Replying to shadow housing minister Mike Amesbury, Pincher revealed that the department was piloting a data collection exercise to understand the prevalence of different external wall system materials on residential buildings between 11 and 18 metres in height.

Pincher told Regulatory Reform Committee chairman Stephen McPartland that the government recognised there were wider remediation costs which would need to be met to ensure the safety of existing blocks of flats.

As a result it has asked departmental adviser Michael Wade to “accelerate work on identifying options for financing solutions that remove barriers to fixing historic defects and protect leaseholders from unaffordable costs”.

He added that the bill must not fall on taxpayers and that the new building safety regime will prevent similar safety defects occurring in future new builds and will also systematically address historic defects.

Finally, Pincher confirmed to Liberal Democrat MP for St Albans Daisy Cooper that no mortgage lender had said they would request an EWS1 form when an existing borrower was renewing their mortgage on the same terms and was not seeking to borrow more.

 

Fewer than 300 fire inspectors to conduct EWS1 inspections

Fewer than 300 fire inspectors to conduct EWS1 inspections

 

He also noted that government was working with the industry to try to increase this number and improve guidance on assessing cladding and other external wall coverings on tall blocks.

In response to a written question from Ruth Cadbury, Labour MP for Brentford and Isleworth, housing minister Christopher Pincher (pictured) revealed the sparse number of qualified inspectors.

“The EWS1 process was designed by the Royal Institution of Chartered Surveyors to support the valuation of flats in high-rise blocks,” he said.

“In some cases, this will require an assessment by a fire engineer. The Institution of Fire Engineers has informed the Ministry of Housing Communities and Local Government (MHCLG) that there are around 291 chartered fire engineers.”

 

Training and support

The EWS1 form was created at the end of last year to help mortgage lenders assess whether properties were safe to lend on.

However, the scheme has been plagued with delays as ministers claim lenders have been extending its use further than initially intended, while inspectors have finding difficulties in obtaining professional indemnity insurance (PII).

This has left some borrowers unable to sell their flats and fearing they may be stuck with their current homes for years until an assessment can be completed.

Cadbury subsequently asked what government was doing increase the number of qualified chartered fire engineers and what support and additional training was available for new recruits.

Pincher replied: “MHCLG and the Home Office are working with professional bodies and industry associations to assess the capacity of the fire engineering sector and support them to develop a robust pipeline strategy.

“We are also working closely with the fire safety sector to develop technical guidance to support the fire risk assessment of external wall systems which will support increased capability within the wider sector and are supporting industry-led approaches to understanding fire engineering resource requirements within the sector.”

 

 

Couple trapped in flat as lenders refuse mortgage without fire safety form that could take ‘years’ to come

Couple trapped in flat as lenders refuse mortgage without fire safety form that could take ‘years’ to come

 

Siobhan Frost and her partner have been warned by their housing association Peabody it could be “several years” before the EWS1 form is ready.

Under the terms of their lease, they are not allowed to rent out the property and are now left feeling frustrated over the issue which MPs say is a “huge problem”.

The couple bought the two-bedroom flat in a seven-storey block in Mint Street, Bethnal Green on a shared-ownership basis five years ago.

At the end of last year, they were in a position to ‘staircase’ up to buy the remaining share of the property from the housing association, meaning they would own the flat in full, and be able to sell it on the open market.

Frost and her partner paid Peabody around £250 for the valuation and were offered a mortgage on the proviso of producing an EWS1 form.

But then the problems began.

 

Fire safety forms introduced last year

EWS1 forms were brought in at the end of last year to give lenders more confidence in offering mortgages on multi-storey buildings following the Grenfell disaster.

A valuer could request the one-page-form from a building owner or representative, which would confirm the material on the walls posed a limited risk or was non-combustible.

If materials did pose a risk a description of fixing the problem is needed.

Frost said she found it difficult to get hold of anyone at the housing association who could provide any information on how to get hold of the form to give to the lender.

In the mean time the mortgage offer expired.

After weeks of chasing, the couple were told by Peabody that it had over 500 buildings to look at and it couldn’t provide a date of when the form would be available.

Frost told Mortgage Solutions: “We were told by Peabody they don’t know how long it’s going to take for the form, it may take a couple of years.

“We also can’t rent it out because of Peabody rules.

“We’re stuck and left in limbo – and about to have a baby. It’s a really frustrating situation.”

 

System ‘not working’

One of the main problems is that there are a lack of qualified insured Chartered Fire Engineers to carry out the surveys.

Furthermore, lenders are requesting the forms more than had been anticipated when they were introduced.

Housing minister Christopher Pincer recently admitted borrowers trying to get a mortgage on properties in multi-storey buildings may have suffered.

He said lenders had agreed “a nuanced approach to risk” was required and to review their policies and advice to valuers after a meeting with minister for building safety Lord Stephen Greenhalgh.

It comes after a report last month from MPs on the Housing, Communities and Local Government committee said the EWS1 process was not working and called for the government to urgently make  changes.

It’s estimated around 2,000 buildings still remain unsafe three years after the Grenfell tragedy.

The building containing Frost and her partner’s flat has cladding on the top floor, which will likely need removing before the EWS1 form can give the building the green light.

The cladding itself is a safety concern for Frost, though the housing association has put in extra fire alarms since the Grenfell disaster.

 

‘Unacceptable to be left in limbo’

A ministry of housing communities and local government spokesperson said: “It is unacceptable that some residents have found themselves in limbo.

“The EWS1 process is designed to support valuations for high rises where cladding may be a concern – this is because of the exceptional risk fire can present at height.

“While not all lenders require an EWS1 form, owners of buildings 18m and over should be as transparent as possible about the construction of their building and fire safety measures in place”

A spokesman for Peabody said: “We understand the frustration and anxiety felt by leaseholders who are in this difficult position through no fault of their own. Regrettably it is an issue affecting thousands of people up and down the country.

“As you will be aware, the problem arose last year and is being driven by mortgage lenders and valuers wanting evidence that is complex and difficult to obtain.

“Many will not lend on a property unless they have evidence that a building is compliant with the latest government advice issued in January this year.

“This evidence is an EWS1 form and to get this we have to carry out a detailed, sometimes intrusive, survey which then has to be signed off by a chartered fire engineer.

“With many thousands of buildings affected there are a limited number of qualified fire experts in the UK who can assess buildings, carry out inspections, confirm whether remediation work is required, and issue EWS1 certification.

“At Mint Street, works will involve replacing the cladding on the upper floors, as well as investigating the external wall system to resolve any issues. These two things will happen at the same time, which means that the fire engineer can sign an EWS1 form based on their assessment of the building after the work is completed.

“We are aware that residents have been concerned about our communications on this. We’ve apologised and wrote to all residents at the development last week to update them on our plans.

“We’ll now be providing monthly updates to keep them up to date on our progress.”

 

‘EWS1 could create more mortgage prisoners than credit crunch’ – Star letter 17/07/2020

‘EWS1 could create more mortgage prisoners than credit crunch’ – Star letter 17/07/2020

 

Two comments were made under the article: Lenders reviewing cladding form use after ‘negative effect on mortgage market’ – housing minister 

The first was from Arron Bardoe, who said: “While I appreciate the gravity and seriousness of this process, it is currently being applied with great zeal by surveyors and the definition of when a certificate is needed is widening.  

“Worse still, even once a building has a certificate of compliance, it then has to renew it every five years if there are no changes or earlier if there have been changes.” 

Bardoe added: “I have a client who owns a flat in London that she is seeking to remortgage from the five per cent rate with her current lender who is not offering rate switches to a more reasonable rate, together with consolidating some debts. 

“The City of London as the freeholder of the building has confirmed there is no cladding only a curtain wall that is not of combustible material.  

“However, the lender’s surveyor will only accept this if the report is from someone with one of the designated qualifications, as they do not trust a director of the housing department of a local authority.” 

 

Unclear process 

Bardoe continued: “We checked the RICS website, which helpfully says: ‘Not every building in scope above 18m will require an EWS1 form – only those with some form of combustible cladding or combustible material on balconies.’ Great, we thought. 

“However, this is contradicted later with: ‘The process results in a signed EWS1 form per building, with two options and outcomes. A – confirms that there are no combustible materials and B recommends that remedial works are carried out. 

“If I understand Point A correctly, a building with no combustible materials needs an EWS1 to confirm it does not need one, which is not required as it does not have any?” 

 

Overuse of rules 

“The overzealous application of EWS1 rules has left many leaseholders with unmortgageable and unsaleable properties. 

“Even where a certificate is required, the rules have been implemented at speed and with some freeholders struggling to obtain an available surveyor,” he added. 

“Thereon, if works are required, these cannot be completed in days, but they immediately put every leaseholder in to limbo for remortgaging or selling their homes.  

“It should be noted that desperate leaseholders are unable to commission the EWS1 themselves,” Bardoe said. 

 

Creating more mortgage prisoners 

Bardoe said: “What does not yet seem to have been realised is that the guidance applies to buildings of all heights that are multi-residential buildings, so even houses converted to two flats seem to fall under the new rules.  

“As the enthusiasm for this new money-making venture continues, we could well see 20-30 per cent of UK housing stock requiring five yearly licensing and many of those to confirm they have no combustible materials, as lenders’ surveyors will not trust old certificates.”  

“The EWS1 could lead to a larger number of mortgage prisoners than due to the credit crunch, so lenders, RICS and the government need to act now. If the current trend is not curbed, lenders could find they cannot agree new loans to up to 30 per cent of the UK market,” he added. 

 

Holding developers accountable 

Very deceptive also commented on the article with concerns around who the responsibility of paying for the certificate fell on. 

They said: “The management company of the new buildings should list the materials and products with the relevant manufacturers for the building with the applicable certificates in the same way they hold building regulation certificates, build guarantees and certificates of insurance. 

“If 300 buildings have the same cladding, why on earth would we demand each building’s tenants pays thousands of pounds to prove the fire safety of the same cladding? Instead the management company could hold the records to produce when needed.” 

“New buildings could work to the new process, to prevent the system at present of a building passing all of the building regulations, only for surveyors to question the fire safety of the same structure in future years. 

“This method would see the big company manufacturers prove their quality, as they should, absorbing any costs. No tenant should be paying years after the event for the suitability or quality of a building material. 

“As with everything else, it should be manufacturers not the purchasers who should prove the fire quality,” they added. 

Lenders reviewing cladding form use after ‘negative effect on mortgage market’ – housing minister

Lenders reviewing cladding form use after ‘negative effect on mortgage market’ – housing minister

 

Housing minister Christopher Pincher (pictured) admitted that lenders had been using the forms more often than originally intended and that borrowers trying to access the mortgage market may have suffered as a result.

He revealed that following a meeting with minister for building safety Lord Stephen Greenhalgh, lenders had agreed “a nuanced approach to risk” was required and to review their policies and advice to valuers.

The External Wall Fire Review (EWS1) process was originally designed by Barclays Mortgages head of valuations Fiona Haggett with the intention of solving the problem of valuing properties with external cladding and allowing occupiers to move again.

However, there have been issues implementing the system.

Valuers have been limited with many unable to obtain professional indemnity insurance (PII), viewings have been backlogged by many months in some cases, while MPs branded it “slow and expensive”.

 

‘Wider scope of buildings than intended’

The issue has been part of the ongoing attempts by government to help address national concerns following the Grenfell Tower fire three years ago and was again raised in Parliament this week.

Pincher was responding to a written question from Shabana Mahmood Labour MP for Birmingham, Ladywood, asking what assessment he had made of the EWS1 form on allowing leaseholders to sell properties.

Pincher said: “The government is aware that some lenders are requesting valuers use the EWS1 form on a wider scope of buildings than was intended and this may be having a negative effect on the mortgage market for such buildings.

“The minister for building safety held a roundtable with mortgage lenders, who agreed a nuanced approach to risk is required.

“They are reviewing their policies and guidance to valuers on the use of the form.”

Mortgage Solutions asked lender trade body UK Finance what changes would be made and when they would be implemented.

UK Finance said it was unable to comment on private meetings.

 

PII cover

Discussing the issue of PII cover during the Flammable Cladding Removal debate in Parliament yesterday, Pincher also noted that meetings had been conducted to help tackle that problem.

“Lord Greenhalgh has met members of the insurance industry and other fire and safety professionals,” Pincher said.

“He is investigating, at pace, ways in which this particular issue may be remedied.”