Mortgage lenders have been providing zero valuations for properties in multi-occupied buildings with potential safety risks, leaving leaseholders unable to remortgage or sell their homes.
In response to this issue, the Royal Institution of Chartered Surveyors (RICS) led a cross-industry working group to develop a standardised process for valuing properties in tall buildings of 18m or over with actual or potential combustible materials in external wall systems or on balconies.
The External Wall Fire Review process required a fire safety assessment to be conducted by a suitably qualified and competent professional, who must complete an External Wall System (EWS) form for each building. A number of issues arose as a result, such as EWS1 forms being routinely requested for multi-occupied buildings regardless of their height or the presence of combustible materials. RICS subsequently updated their guidance in April 2021, setting out which types of buildings would need an EWS1 form as part of the evaluation process.
However, on 21 July 2021 the government announced that it did not believe buildings under 18m should require an EWS1 form and any already provided for these buildings should be reviewed. We understand that RICS may further update its guidance, but it is unlikely to do so until the government withdraws its advice note on safety risks in multi-occupied, multi-storey buildings. The government has committed to do so later this year.
We are engaging with the government, the sector, the wider industry and leaseholder groups to understand the current situation and what this means for valuing, selling and purchasing flats in multi-occupied buildings. We believe that the ultimate solution to this issue is for the government to provide upfront funding for all remedial works.