5 years has passed since the tragedy that occurred in June 2017 in the Grenfell Tower block where a fire broke out that devastated many. In the initial phase of inquiry, it was determined that cladding that was installed during refurbishment contributed to the spreading of the fire due to it being made from flammable materials. This has had a great effect on the UK in many ways, mainly the fact that that it awoke the realisation that safety measures need to be put in place to prevent the result of further tragedies.
Cladding is an exterior layer of material added to a building to either increase insulation, protect from potential weather damage or for visual/appearance reasons. However, as mentioned Grenfell brought to light the fact that many forms of cladding are flammable. Ultimately this caused the surveying and mortgaging industry to react as they then introduced what is known as an EWS1.
What is an EWS1?
In 2019 the Royal Institution of Chartered Surveyors (RICS) introduced what is known as an EWS1 which is an External Wall System Fire Review Certificate that plays a part for leaseholders when buying, selling, or mortgaging properties. For a development to obtain an EWS1 a fire safety expert must come and inspect the development, completing a risk assessment to determine whether it is fire safe and meets the requirement to obtain the certificate. For certain developments leaseholders will be asked to present an EWS1 to lenders when looking to value, sell or re-mortgage properties.
In this process the development is assigned one of 5 ratings either A1, A2, A3, B1 or B2.
Those in the A ratings are where external materials are unlikely to cause combustion and are as follows:
A1 – No attachments made using significant quantities of combustible materials.
A2 – An appropriate risk assessment of the attachments confirming no remedial works are required
A3 – The two options above aren’t applicable and there may be potential costs for remedial works.
B ratings apply to those where combustible materials are present and are as follows:
B1 – The conclusion is reached that the fire risk is sufficiently low, and no remedial works are required
B2 – The adequate standard of safety is not met, and client is identified of organisation for remedial works and interim measures required.
The Ratings which are considered “passed” and in which most lenders will lend are A1, A2 and B1
The best way to detail the effect this has is to identify 3 different property types and the ways in which each is affected.
Due to the heightened awareness of these issues current new builds are generally not affected by the issue as they are built to adhere to fire regulations to ensure that once completed, they will be eligible for an EWS1.
High Rise – 6 Stories & Above
Resale/existing developments have been the greatest affected by this, in particular those 18 metres (6 stories) and above. Many existing/resale developments were not built with the same knowledge and awareness for fire safety we have now post Grenfell so as a result they must go through the process of applying and going through an EWS1 check. This process alone can take anywhere ranging from 6-12 months and comes at a cost too. Then based on the EWS1 rating this can lead to remedial works being required again increasing costs and time before the development is up to the standards required to meet the requirements.
This involves costs of building owners and in some cases application for Government funding, another time increasing process that leaves leaseholders often unaware of how long they may be waiting until they can look to value, sell, or re-mortgage their property. However, although an EWS1 with a passable rating means that most mortgage lenders will lend it doesn’t always mean that all fire safety works have been carried out. Even after an EWS1 is issued there might be other works needed such as changes to stacked balconies which can add extra cost and time to an already lengthy process.
Low Rise – Below 6 Stories
Then there those in low rise developments 6 stories and below that find themselves in a unique position. Some of these developments have cladding and some don’t and in a lot of cases these developments don’t technically need an EWS1 to value, sell or re-mortgage properties. As a result, management companies may be reluctant to go through the process of applying for one due to the costly and timely nature, but this can then affect leaseholders. If someone is then looking to get a valuation, sell or re-mortgage they may go through the process and a surveyor may recognise the lack of an EWS1 and ultimately decide they aren’t comfortable dealing with a property that hasn’t been deemed fire safe. This then can leave leaseholders in a sort of limbo where they can’t switch lenders due to a lack of an EWS1 despite the development not technically needing one. Even if the lack of an EWS1 isn’t an immediate issue for a leaseholder because they don’t plan to sell it can mean them becoming stuck with the same lender and paying higher interest rates than what they could do if they had the option to change lenders.
Fire safety not only has a cost for the remedial works required but it will normally mean a higher insurance charge which is increased because of the lack of fire safety assurance. This also becomes an issue not only for current leaseholders but for prospective buyers as they need to budget for these costs and sometimes there is no certainty of when these costs will come down.
In conclusion leaseholders with properties in developments with an EWS1 are benefitting from having the ability to market their properties in a market where demand far outweighs available stock. However, this leaves those still waiting for results and solutions feeling like they are in the dark playing a perpetual waiting game. We at Julie Twist Properties understand this and have multiple members of staff experiencing these same issues with properties they own too. Therefore, if you are a leaseholder and unsure of the future, looking to sell or not and needing consultancy feel free to speak to a member of our sales team by calling us on the number below. Consultancy is free of charge and our team will aim to help you through this process by being transparent in establishing an understanding of what is a greatly complex issue.
To speak to a member of our sales team call us on 0161 834 8486 or click here to contact us.
Written By Joseph Climance
Posted by Simon on May 26th, 2010
Posted by Simon on June 25th, 2010
Posted by Simon on November 8th, 2012