EWS1 requirements mean many flats will become un-mortgageable?

by Readers Question

9:41 AM, 27th May 2020
About a month ago

EWS1 requirements mean many flats will become un-mortgageable?

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EWS1 requirements mean many flats will become un-mortgageable?

I have had an offer accepted on a modern (2009) flat, which I was planning to add to my rental portfolio. It’s on the middle floor of a small 3 storey block. However, I’ve now been told that the valuer cannot recommend that the mortgage company lend on the flat because of new certification requirements with regard to external walls.

Apparently all blocks of flats/residential buildings over 18 metres tall must have an EWS1 certificate to say that the external walls are compliant with certain standards, largely to do with fire safety. In January 2020 the advisory notice AN14 was issued, which states the government’s intention to apply it to all residential buildings containing more than one household.

However, because the whole building has to be inspected thoroughly for compliance, the process of getting EWS1 certification ‘costs thousands of pounds and can take months to complete’ (arma.co.uk).

The government have accepted a suggestion by RICS that an independent, licensed building inspector or fire inspector can certify the building as safe. However, professional indemnity insurers have been raising premiums hugely, or simply refusing cover to such inspectors altogether, meaning that many are refusing to sign EWS1 certificates because of the risk of exposing themselves to huge personal liability.

The builders (Taylor Wimpey) have stated that because the building in question here is not over 18 metres tall, and does not have cladding (it’s rendered) or any combustible add-ons like wooden balconies, it does not require EWS1 certification. However, because all such buildings are likely to need certification in the future the valuer is risk averse and the building society will not lend on it.

However, I’m inclined to think that even if I could get a mortgage now, the situation may make it impossible to sell the flat in the future, or there may be huge costs incurred to get the certification the next time someone wants to buy or sell a flat in the building.

This seems like a crazy situation. Although obviously there is a need to ensure that buildings are safe in the case of fire, post Grenfell, as it stands, this is going to make a large number of flats (my mortgage adviser reckons around 75%) un-mortgageable.

Tricia

Editor’s Note: Click here for Council of Mortgage Lenders External Wall Fire Review Handbook



Comments

terry sullivan

10:35 AM, 27th May 2020
About a month ago

another example of why uk is fecked--bureaucracy running rampant--there are hundreds of thousands of such properties in uk--is un/eu involved as was case with the grenfell cock-up?

Simon Williams

11:19 AM, 27th May 2020
About a month ago

Risk aversion is like a virus and this illustrates how it is spreading through the building industry. As you say, no-one doubts that buildings with genuinely high risk materials should be given special attention.

The government guidance I have seen suggests that surveyors have no justification for alarm. The guidance points out that even now, all building owners should be risk assessing their external walls, regardless of height, as part of normal fire risk assessments which have been around ever since the 2005 Fire Order was introduced. The guidance further states that it is the intention of the government to legislate to make this requirement more explicit. I see nothing in that guidance that will require special certification for normal blocks of flats below 18 meters.

Sadly, what has happened here, is that the government has previously created confusion out of which has sprung this extreme risk averse culture.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/869532/Building_safety_advice_for_building_owners_including_fire_doors_January_2020.pdf

terry sullivan

12:03 PM, 27th May 2020
About a month ago

its called gold plating--cs is good at that--even if useless for virtually everything else

Smartermind

12:48 PM, 27th May 2020
About a month ago

The writing is on the wall - avoid and back out, while you can or repent at your leisure!

Ed Regent

15:18 PM, 28th May 2020
About a month ago

As somebody who has invested heavily in city centre apartment blocks, mainly let out to young professionals, I wish I hadn't been so keen. Issues with fire safety and leases generally have put me right off this sector now. The only way it could have been worse if they had been student blocks with all the ramifications that brings with it during this Covid crisis. I'd echo the advice above... walk away!

Coops

7:46 AM, 30th May 2020
About a month ago

I had exactly the same problem on a remortgage, I am not sure if it was down to the surveyor or what the mortgage lender was requesting, so put it down to a desktop valuation with the surveyor being over zealous.
In the end I changed mortgage lender and it went straight through, luckily the previous lender had free legals and survey, so it was their loss.

This was on a brick building with small amounts of render around the balcony.

Puzzler

8:48 AM, 30th May 2020
About a month ago

Your BS valuer is exceeding his authority but I don't think you can do anything about it, although you could register a complaint. If you have used a broker ask them to do it as they have more clout. I recently did this for another clause I could not agree to.

Objective - This form is intended for recording in a consistent manner what assessment has
been carried out for the external wall construction of residential apartment buildings where the
highest floor is 18m or more above ground level or where specific concerns exist (Note 1). It should
not be used for other purposes.

IT SHOULD NOT BE USED FOR OTHER PURPOSES

You could try another lender if that doesn't work or cut your losses and withdraw

Be a Landlord

9:28 AM, 30th May 2020
About a month ago

Reply to the comment left by Simon Williams at 27/05/2020 - 11:19
I have been selling an apartment since an offer was agreed back in October. In late Feb this issue of an addition survey emerged. Like this instance the block is rendered with zero timber on the outside of the building. It's complete overkill an doing massive harm to the housing market. Our management company actually paid £7000 for the survey in April but still no form two months later.

Trish

22:08 PM, 1st June 2020
About a month ago

Reply to the comment left by Be a Landlord at 30/05/2020 - 09:28
That's interesting to know, Simon. The management company (of the block of flats where I hoped to buy) have now said that they will get an EWS1 certificate for the building so I've agreed to go ahead with buying the flat once this is done. Wonder how long I'll have to wait.....

nobesy

10:37 AM, 23rd June 2020
About A week ago

Reply to the comment left by Coops at 30/05/2020 - 07:46
Which lender did you go with in the end?! Asking for a friend...

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