MortgagesMar 8 2021

RICS issues cladding guidance in bid to unlock flat market

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RICS issues cladding guidance in bid to unlock flat market
Credit: ANDY RAIN/EPA-EFE/Shutterstock

The Royal Institution of Chartered Surveyors (RICS) has issued new guidance on valuing properties with cladding, in a move to “unlock” the flat market for buyers and sellers.

The guidance, entitled ‘Valuation of properties in multi-storey, multi-occupancy residential buildings with cladding’, seeks to clarify the types of properties that will, and will not, require additional inspections arising from concerns over fire safety.

The professional body opened a consultation in January on proposed guidance aiming to improve consistency in EWS1 requests.

According to RICS the consultation received almost 400 responses, two-thirds of which were from leaseholders.

Dame Janet Paraskeva, chair of the RICS standards and regulation board, said: “We recognise the significant distress caused to leaseholders struggling to sell flats in blocks with external cladding.

“This announcement is a crucial step in unlocking the market, by ensuring that only those buildings where there are risks of costly remediation as a result of safety concerns from cladding are subject to additional checks.

“The guidance is anticipated to result in a reduction in the number of EWS1 requests which will therefore allow more focus on the assessments of higher risk buildings, which should speed up the overall process whilst ensuring appropriate protection for lenders and purchasers.”

According to RICS, the guidance creates “clarity and consistency” about when a valuer is not required to request further investigation of cladding through an EWS1 form before valuing a property in a building of multiple occupation.

For example, an EWS1 form should not be required when a valuer or lender can establish that a building owner has met government advice on multi-storey, multi-occupied residential buildings.

Additionally, an EWS1 form should not be required for a building above 18m with a valid building control certificate confirming that construction works meet current building regulations.

Ben Elder, head of valuation standards at RICS, commented: “We are pleased to see, from the consultation responses, that many believe that the guidance will reduce the number of EWS1 forms requested.”

He added: “With the majority of lenders in support of the guidance, we now call on all UK lenders to support the guidance and work with their valuation providers to implement.”

The professional body said it would work with the government and other stakeholders to ensure the guidance is implemented by April 5.

Robert Jenrick, housing secretary, commented: “I welcome RICS’ new guidance which will mean nearly 500,000 leaseholders will no longer need an EWS1 form - helping homeowners to sell or remortgage more quickly and easily.”

He added: “The government has also provided an unprecedented investment of more than £5bn to protect leaseholders from the costs of cladding remediation.”

Last month the housing secretary announced the government would fully fund the cost of replacing unsafe cladding for all leaseholders in residential buildings in England that are at least 18m high.

The announcement came after an agreement was reached in November between the government and RICS, UK Finance and the Building Societies Association (BSA) that owners of flats in buildings without cladding would no longer need an EWS1 form to sell or remortgage.

Mortgage brokers have previously reported delays and scuppered plans encountered by clients as a result of EWS1 forms.

The EWS1 process was developed in 2019 by RICS, UK Finance and the BSA in response to government advice to check all potentially unsafe cladding systems for buildings above 18m following the Grenfell Tower disaster.

chloe.cheung@ft.com

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