On the 8th March 2021, The Royal Institution of Chartered Surveyors (RICS) released guidance for apartment owners and apartment sellers that have been hampered by cladding when trying to re-mortgaging or secure a sale.
The issues related to the fire safety of a building and the apartment for which the lenders / mortgage providers were not satisfied due to elements of a building containing unsafe materials as part of their make-up. There has been numerous stories of £0 values on some apartments and / or category 3’s marked against the apartments based on age and height of the buildings in question. Owners and purchasers will be aware of the External Wall System reports (or EWS1 reports as they have become more commonly known), which is effectively a review of the building followed by a rating based on fire safety. Owners have been obliged to produce an EWS1 report to satisfy lenders but, there has still been a lack of understanding in relation to these reports and also what lenders require. Now we are starting to see some light with regards to this ongoing situation.
This guidance produced by RICS, explains that from early April there will ne no need for an External Wall System (EWS) check on buildings of four storeys or below as long as they are not clad in aluminium composite materials (ACM), other metal composite materials (MCM) or high-pressure laminate (HPL).
Also, taller buildings won’t need to be checked if they do not have ACM, MCM or HPL present, and if the cladding covers less than 25% of the building. More information on this to follow below.
The guidance states that: Although this consolidated advice note was intended for use in England, it has also been used for advice in the rest of the UK. The Local Government and Communities Directorate in Scotland is producing a similar advice note for use in Scotland, reflecting differences in legislation, which reflects the English advice note in advising on inspecting lower-rise buildings in addition to high-rise.
The UK government had made a £100 million pound pot of funding available to address this issue and a further £350 million expected. The Scottish Housing and Planning minister, Kevin Stewart, is expected to outline measures here in Scotland as part of their review, working closely with industry bodies, homeowners and others through a number of working groups.
One of the major factors will be the lenders and what they deem to be acceptable but this RICS guidance will be a step in the right direction.
Further information from RICS where EWS1 reports would be required, from the 5th April 2021:
For buildings over six storeys, an EWS1 form should be required where:
- There is cladding or curtain wall glazing on the building or;
- There are balconies which stack vertically above each other and either both the balustrades and decking are constructed with combustible materials (e.g. timber) or the decking is constructed with combustible materials and the balconies are directly linked by combustible material.
For buildings of five or six storeys, an EWS1 form should be required where:
- There is a significant amount of cladding on the building (for the purpose of this guidance, approximately one quarter of the whole elevation estimated from what is visible standing at ground level is a significant amount) or;
- There are ACM, MCM or HPL panels on the building* or;
- There are balconies which stack vertically above each other and either both the balustrades and decking are constructed with combustible materials (e.g. timber), or the decking is constructed with combustible materials and the balconies are directly linked by combustible materials.
For buildings of four storeys or fewer, an EWS1 form should be required where:
- There are ACM, MCM or HPL panels on the building*.
* Note: metal cladding and ACM/MCM are visually very similar, so if metal panel cladding is present, the valuer should confirm with the building owner or managing agent in writing that they are not ACM/MCM, or, if confirmation cannot be obtained, an EWS1 inspection should be requested.
For more information you can find the full guidance HERE.
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