RICS issues new guidance on property cladding and EWS1 certification
On 8 March 2021, the Royal Institution of Chartered Surveyors (RICS) produced new guidance in an attempt to significantly reduce the number of properties requiring EWS1 certificates.
EWS1 certification was introduced to enable mortgage providers to make informed lending decisions on high-rise residential properties, however, the Government extended this advice to smaller properties last year which resulted in mortgage lenders demanding EWS1 certification from a wider range of sellers. These demands substantially outweighed the number of professionals able to provide EWS1 certificates, effectively causing the leasehold market to stagnate for hundreds of thousands of leaseholders. Even buildings where cladding was of no concern were required to produce EWS1 certificates as insurance providers and lenders were refusing to proceed without them.
The RICS are hoping this new guidance will mean that approximately 500,000 leaseholders will no longer need an EWS1 certificate, which should help speed up and simplify the selling or re-mortgaging process.
The guidance, which is due to be implemented by 5 April 2021 with earlier adoption encouraged, sets out the following criteria for when an EWS1 should now be required:
- For buildings over six storeys: 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 material (e.g. timber), or the decking is constructed with combustible materials and the balconies are directly linked by combustible materials.
- For buildings of five or six storeys: where there is a significant amount of cladding on the building (which the RICS suggest to be approximately one quarter of the whole elevation); 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 material (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: where there are ACM, MCM or HPL panels on the building.
This new guidance will come as welcome relief to many as it seeks to ensure that only suitable buildings that are at genuine risk of requiring costly remediation works are subject to the additional checks and the RICS is hopeful that adoption of this guidance will now unlock the leasehold market.
Although many lenders are expected to adopt this guidance, it will ultimately be a decision for each lender to make based on their own risk appetite.
Please note that this information is provided for generalknowledge only and therefore specific advice should be sought for individual cases.
For further information, please contact Kenny Friday