Since the tragic fire at Grenfell Tower, a number of potential building safety concerns have been uncovered. As a result, the government has been conducting fire safety tests on specific materials, such as the ACM cladding which was found on Grenfell Tower. Building owners have also been inspecting their buildings for these materials and any other safety concerns and remediating them as a priority.
Because the issues are so complex and there are so many buildings to inspect and remediate, it is not always certain whether an individual building has been appropriately constructed using safe materials. Mortgage providers are therefore asking for additional information about a building’s external wall system through the EWS1 form, before approving mortgages.
Housing associations know how eager leaseholders will be to obtain EWS1 forms so that they can remortgage, move, or buy additional shares in their home, particularly during such a difficult time when they may be facing other financial pressures.
Unfortunately, there is a very limited capacity among fire engineers and other professionals that need to sign off the form, and they are in high demand to conduct building safety inspections and advise on any remediation. Many housing associations may have a large number of buildings that they’ve been asked for EWS1 forms for, as well as large numbers of buildings that they need to remediate. Given the limited resources, housing associations are having to direct these first at higher-risk buildings.
This could mean that it will take some time for EWS1 forms to be available on all buildings where they are requested. Some housing associations with large numbers of buildings have estimated that it could take them up to a decade to respond to all requests for EWS1 forms while remediation works also need to take place.
We know this will be heartbreaking to those affected, so we’re doing what we can to press the government and industry for a solution that enables the housing market to function until remedial works programmes can be completed.
An EWS1 form can only be completed by a competent professional who has been instructed by the freeholder or managing agent for your building. If your lender or your buyer’s lender has requested an EWS1, you will need to contact your landlord to ask them to complete the request. It is important that you do not try to instruct someone to do this on your ownas there have been cases of leaseholders paying for people to complete the forms who they’ve later found out to be acting fraudulently. Lenders will only accept an EWS1 form that has been completed by a competent professional whose expertise has been organised by the building freeholder or its managing agent.
An EWS1 form contains five categories into which a building can be placed – three under option A, where materials in the external wall are unlikely to support combustion and two under option B, where combustible materials have been identified in the external wall system. Where an EWS1 places a building in either of the categories in option B, it is our understanding that a mortgage provider will expect the external wall to have been remediated before it will consider mortgage applications against the property.
While the original intention of the EWS1 form was to ensure a process for valuing buildings 18m and above while potential safety concerns were being inspected and remediated, the organisations that created the form have since said that it can also be applied to buildings below 18m if they have 'specific safety concerns.' They say this is due to government advice relating to buildings of all heights published in January 2020.
Housing associations with multi-occupied buildings will be organising inspection programmes to provide EWS1 forms, but importantly to decipher whether the building requires remedial works to fix any safety concerns.
There is a limited number of competent professionals needed to inspect buildings, advise on remedial works and complete EWS1 forms, as well as limited housing association capacity to oversee the work. For these reasons, housing associations that are responsible for many multi-occupied buildings are organising inspections and remedial works according to risk, so that this limited resource is first directed to buildings that need it most.
The complexity of these works means that it could take many years for a landlord with many buildings to inspect their entire portfolio, which is why we’re calling for further government support to enable inspections and works to be completed more quickly.
We recognise that this will be deeply distressing for people living in lower-risk buildings, who could have to wait many years before their landlord can provide an EWS1 form for their building. However, the very limited resources at our disposal for this critical works means that we must direct them according to risk above all.
Some housing associations are reviewing their policies on subletting to enable those unable to sell to still move out of their property. However, not all housing associations are able to do this as there are often legal or other circumstances which affect their ability to allow subletting.
For shared owners, or those in other affordable home ownership properties, subletting is not generally permitted. This is because housing associations receive government funding to provide these homes and it is a condition of receiving this funding that they cannot be sublet. Under the circumstances, some housing associations are requesting specific permission for a temporary change to this approach from the relevant government agency, so that people who need to move home potentially have the option to do so.
We recommend that, whatever your circumstances, you contact your housing association directly to discuss whether this option is available to you.
As charitable organisations set up to provide homes and support for those on the lowest incomes, housing associations can’t provide blanket support to leaseholders to help with mortgage costs. Instead, they are working as quickly as possible to be able to complete EWS1 requests for their buildings and calling for a solution from the government to this frustrating and unfair situation.
The demand for EWS1 forms, which can only be completed by a very limited number of competent professionals, is incredibly high. These same professionals are also the people we need to work with to advise on the remedial works that need to be urgently completed for buildings with safety concerns. This means that EWS1 form requests for buildings that are lower-risk may take a number of years to complete.
We understand this will be an extremely stressful situation for leaseholders whose monthly housing costs could subsequently increase. We recommend that you consider speaking to your mortgage provider if you have financial concerns or, if you’re a leaseholder in an affordable homeownership home – such as shared ownership – speak to your housing association directly.
The tragic fire at Grenfell Tower uncovered a systemic failure of building regulations. The uncertainty this created about whether similar buildings were safe meant that housing associations opted to review their properties for any safety concerns so that they could be rectified as a matter of urgency. Remediation programmes are complex and can take many years to complete.
As building inspections have continued, all sectors and industries with a role in the safety of buildings have become aware of the scale of potential building safety issues. There are around 13,000 high-rise buildings in England and some of the safety concerns go beyond the cladding and external wall system. In addition, due to limited capacity within testing houses, it has taken some time for specific materials to be confirmed as safe for use on buildings. The government undertook a testing programme after the fire at Grenfell Tower on Aluminium Composite Material (ACM) cladding and has conducted some exploratory tests on other materials since. However, while the government’s testing programme on other materials was a useful indicator of these materials’ performance in a fire, it did not give unequivocal results on whether or not these materials were safe to be used. The government conducted one fire safety standard test on a cladding material that was not ACM, publishing the results only in July 2019.
As the scale of potential safety concerns has become clearer, so has the potential cost of rectifying buildings that need it. This is likely to run into billions of pounds. The government only made funding available for the removal and replacement of ACM cladding on social housing buildings in May 2018, followed by funding for private sector buildings in summer 2019. More recently, the government has made funding available for remediation on some high-rise buildings with non-ACM combustible materials. However, by the government’s own estimates, this will only fund remediation works on around a third of eligible buildings and only became open for applications in summer 2020.
While housing associations are doing what they can to remediate buildings as an utmost priority, the scale of the task, together with a lack of sufficient funding and a paucity of requisite skills, means they are not able to remediate buildings as quickly as they want to. We are therefore calling for government to support us by providing upfront funding for remedial works to all buildings that need them, and by prioritising resources to direct them first at buildings that need them most.
In the months following the fire at Grenfell Tower, many surveyors were struggling to provide a valuation for flats in high-rise buildings, due to the uncertainty over building safety concerns that had been uncovered in some buildings of those heights. This meant that people with flats in high-rise buildings – and some in lower-rise buildings – were already struggling to access mortgage finance, but didn’t have any route to overcome the issue.
The lending and valuations industry bodies therefore created the EWS1 process to enable lenders to gain the reassurance they needed to inform mortgage decisions. This process was only intended to apply to buildings above 18m, to reflect government guidance that only buildings of this height needed to be reviewed for safety concerns. We know that the introduction of the EWS1 specifically for buildings 18m and over meant that sales and remortgage and staircasing requests for flats in lower rise buildings were generally able to continue.
However, in January 2020, the government published updated guidance that advised those responsible for multi-occupied buildings of any height to review their buildings for safety concerns. In turn, this has created uncertainty for lenders over whether they will permit the use of flats in these buildings as security against a mortgage, resulting in surveyors not providing them with a value.
Due to the various safety concerns that have been found in multi-occupied buildings over the last three years, it is the responsible course of action to review these buildings. Resident safety is housing associations’ top priority. They conduct regular Fire Risk Assessments of their properties to check for any significant safety issues, with any improvements needed on safety equipment or procedures implements as a matter of urgency.
These are in addition to the inspects of external walls. Where these fins any considerable safety issues, housing associations are putting in place interim safety measures until more permanent measures can be implemented. Buildings that present greater risks have been inspected and remediated first and housing associations have made considerable progress with these buildings.
Housing associations do not believe that leaseholders should have to foot the bill for remedial works that are the result of a building regulatory system that was not fit for purpose. However, as charitable organisations providing secure homes for people on the lowest incomes, we do not believe housing associations should have to pay either, Housing associations commissioned buildings in good faith and, as a result of the regulatory system being unfit for purpose, they now find that these may be unsafe. Housing associtions may also be unable to pay for leaseholders' share of remedial works costs, due to laws around how charitable funds can be spent.
The government has made funding available to both housing associations and private freeholders for the removal and replacement of ACM cladding – the same as that found on Grenfell Tower. More recently, it has also opened up applications to its Building Safety Fund, for the remediation non-ACM combustible cladding materials on high-rise buildings owned by private freeholders. This means that leaseholders in eligible buildings that receive funding will also not have to pay for works. Housing associations with eligible buildings can also claim back a portion of the cost of remediation so, where a housing association receives funding, leaseholders in these buildings will not have to pay for works. However, the government has estimated that its £1bn Building Safety Fund will only cover the costs of remediation for around a third of buildings that are eligible to claim from it, so not all housing associations will be able to access this funding.
Where housing associations are unable to access government funding, whether because they have eligible buildings that have not been able to access the fund, or buildings that are not eligible for funding, they are pursuing all possible cost recovery routes, including warranties, buildings insurance and liability claims from the original building developers. As charitable organisations, they have to follow the law in how they spend charitable funds, and may not legally be able to pay for leaseholders’ share of remedial works. In cases where a housing association cannot secure funding via other routes, it may have no choice but to charge its leaseholders for their share of costs.
Housing associations do not want to charge their leaseholders. As their trade body, we are pressing the government for further financial support, predominantly so that remediation works can be conducted as quickly as possible, and so leaseholders with housing associations landlords do not have to pay large bills for remediation work. We would urge people affected by this crisis to contact their MP, so that they can add their voice to the campaign pressing government for action.
Funding is not available for all housing association buildings.
There is funding available to both housing associations and private freeholders for the removal and replacement of ACM cladding – the cladding found on Grenfell Tower. There is also a £1bn Building Safety Fund for unsafe non-ACM cladding on high-rise buildings. However, this funding is primarily directed at the private sector. Housing associations with eligible buildings can only claim back a portion of the costs for remediating eligible buildings where those costs would be passed to a leaseholder. This element of the Building Safety Fund opened in August and closes at the end of 2020, so it isn’t yet clear which buildings will receive this government funding and which will not.
The government has also estimated that the Building Safety Fund will only cover the costs of remediation for around a third of buildings that are eligible to claim from it. It has said that it will not provide any further funding for remedial works to buildings that need them.
On 19 October, the Minister for Building Safety, Lord Greenhalgh, said that leaseholders would not be protected from all of the costs of remedial works, but that the government would work to make them affordable where possible. It is not yet clear how the government intends to ensure that remediation works bills are affordable.
Housing associations do not believe that leaseholders should have to pay for remedial works that are caused by a systemic failure of building regulations. However, as charitable organisations, we do not believe that housing associations should have to pay these bills either. While housing associations who own buildings that require remedial works are responsible for ensuring the safety of residents in these buildings, and are prioritising resources for remedial works as a result, we are also responding to a systemic failure of building regulations.
As charitable organisations, housing associations provide affordable housing to people on the lowest incomes. We have a responsibility to all of our residents, and others in our communities, to remain financially secure so that we continue to provide and build homes for the people who need them. Housing associations must also adhere to strict regulations on spending charitable funds, ensuring this is only spent in the pursuit of our charitable objectives. This means housing associations may not legally be able to pay for leaseholders’ share of remedial works – and this is why we have been calling for additional funding so that our leaseholders do not have to pay for the works themselves.
Housing associations are doing all they can to find alternate sources of funding for remedial works, whether through warranty or buildings insurance providers, or by pursuing liability claims against the building’s original contractors. Charging leaseholders is an absolute last resort and one we are working hard to avoid.