Since the RICS Consultation recommendations were published on 8th March 2021 has there been any difference to valuations of flats with building safety issues? The guidance came into effect on April 5th, and was designed to restrict the use of EWS1 forms where possible, as lenders were routinely asking for EWS1 certificates if any cladding was present on any flat, regardless of height. The guidelines have been amended so that no flat that is in a block without either cladding or has vertically stacked balconies containing combustible material should be required to undertake an EWS1 assessment. In addition, all buildings of four storeys or fewer , even if they have cladding and balconies , will also be exempt, unless their cladding consists of any type of MCM (Metal Composite Material) or HPL (High Pressure Laminate) panels.
According to the MHCLG and Robert Jenrick, 500,000 fewer leaseholders will no longer need an EWS1 form. They say that the "majority" of mortgage lenders have signed up, including NatWest, Barclays and Yorkshire Building Society. However, UK Finance have commented that this is a decision for each lender, and they are each carrying out their own risk assessment. The guidance will not be retrospective.
In summary, from what we have seen in the market, funders are still cautious and need to be consulted individually on a case by case basis and at least two of the top retail social housing lenders require EWS1 forms outside the RICS guidance. However, some welcome the clarity and consistency that the RICS consultation has brought, but time will tell how far the funders will be following the valuers lead.
Originally published 4 May 2021.
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