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What to do if your building's cladding is blocking your move

What to do if your building's cladding is blocking your move

A 4-minute read where we look at the reason why homeowners are struggling to sell or re-mortgage and what's holding buyers back from buying their dream home.

After the terrible and tragic fire which took 75 lives at the Grenfell Tower back in June 2017 the type of cladding a building has around it (if any) has, correctly, come under very close scrutiny.

This spotlight on cladding and rightly ensuring its safety can create challenges for people living in buildings that feature cladding. Owners can face months, possibly years of delays because they cannot get hold of new fire safety paperwork required by banks and building societies.

What's Happening?

Many lenders are asking for evidence of an external wall survey, which comes in the form of something called an ESW1 certificate. The problems begin as people find that their building does not have one.

Surveyors are reporting they cannot be sure that a building is cladding free or fire safe. Because of this the mortgage company will not lend unless they see the certificate which the management company usually can't or won't provide.

The impact is that homeowners are not only unable to sell, but unless they can find a cash buyer, they can face months on their lenders most expensive deal, the standard variable rate.

The rules brought in after the Grenfell fire mean that surveyors acting for mortgage lenders are making extra checks to ensure a building's construction is free of combustible materials.

What is an ESW1 form?

The External Wall Survey was launched to ensure older blocks of flats weren't built with combustible materials, such as cladding or insulation, giving mortgage lenders confidence to lend on apartments built before changes to building regulations in late 2018. The ESW1 form checks that the external
wall system (cladding, Insulation, Fire break systems, etc.) are safe.

The EWS1 is recommended for residential blocks of 18 metres or taller and must be requested by the block's original developer. One completed survey
is recommended per building.

The EWS process, and resulting form, is a set way for a building owner to confirm that an external wall system (EWS) on residential buildings has been assessed for safety by a suitable expert.

Fire Review

The External Wall Fire Review process will require a fire safety assessment to be conducted by a suitably qualified and competent professional delivering
assurance for lenders, valuers, residents, buyers, and sellers.

The review was developed through extensive consultation with a wide range of stakeholders, including fire engineers, lenders, valuers, and other cross-industry representatives.

The process itself involves a "qualified professional" conducting a fire-risk assessment on the external wall system, before signing
an EWS1 form, which is valid for the entire building for five years.

EWS1 surveys are expensive with costs typically passed to residents through their service charges even where no fire safety
defects were found.

The form was designed following Government advice regarding external wall systems on buildings above 18m. It was created to ensure buildings over 18m tall could be assessed for safety to allow lenders to offer mortgages.

Not every building above 18m will require an EWS1 form – only those with some form of combustible material, making them unsafe, or, for example, combustible material on balconies.

2020 Changes

Changes in Government advice in January 2020, bringing all buildings into scope, mean some residential buildings below 18m which have' specific concerns', may now require an EWS1. Examples include 4-6 storey buildings which may have combustible cladding or balconies with flammable materials and therefore are a clear and obvious risk to life safety and may require remediation in accordance with the latest Government advice.

How would the EWS1 form factor into buying, selling, or re-mortgaging of an apartment?

The EWS (external wall system) process, is agreed by representatives for developers, managing agents, fire engineers, lawyers, lenders and valuers, and has been adopted across the industry.

Its purpose is to ensure a valuation can be provided for a mortgage or re-mortgage on a property which features an external wall cladding system of uncertain materials. It is something that has both safety implications, and which may affect the value if remediation is required due to the fire risk associated.

Two outcomes are formed from carrying out the ESW:

1. Confirms that there are no combustible materials

2. Recommendation that remedial works are carried out

Where a building is found to need remedial works, this will need to be carried out by the building owner, to ensure the safety of the building before a mortgage can proceed unless the lender agrees otherwise.

Costs and questions

The costs of any necessary work are nearly always uncertain until detailed inspections are made. And the timescale even more unpredictable, but what we do know is that this hold up will delay many owners from being able to sell their property and prevent many people from buying their dream home until these issues are rectified which could run into years.

If you want to know more about this and how it may affect you, please call our expert team who will be happy to discuss this with you.