Many constituents have raised concern with me regarding building safety in leasehold properties. Three years on from the Grenfell tragedy, 227 buildings are still covered in dangerous ACM cladding and thousands more are clad in non-ACM flammable material.
The Government’s lack of action over the last three years to tackle the building safety crisis has left thousands of leaseholders trapped in unsafe homes, which they are unable to sell or re-mortgage. They are being forced to pay enormous sums for remediation and interim fire safety measures such as ‘waking watch’.
I have raised local concerns with the Department for Housing, Communities and Local Government who maintain advice from the Independent Expert Advisory Panel is not legally binding. You can read the responses to my questions online here: https://questions-statements.parliament.uk/written-questions?SearchTerm=&DateFrom=19%2F12%2F2019&DateTo=31%2F03%2F2021&AnsweredFrom=&AnsweredTo=&House=Commons&MemberId=4491&Answered=Any&AnsweringBodyId=7&Expanded=True
In their letter of 1 October, Lord Greenhalgh explains that the new industry standard EWS1 form is not a Government document but they are aware lenders are now insisting on this for all mortgage applications. The Minister assures me MHCLG are working with the industry to address the resulting stalemate between lenders and building owners.
I have also asked the Financial Conduct Authority for an update on the advice they provide mortgage lenders regarding buildings safety advice. The Interim Executive Director of Strategy and Competition, Sheldon Mills, replied that the valuation of high-rise buildings has been complicated as fire-safety issues have come to light. Sheldon confirms that the EWS1 form is not a legal requirement and suggest mortgage intermediaries may have suggestions on more suitable products. The full text of this letter can be found below this article.
The Government must get a grip of the broken EWS1 system, and put in place a much faster and fairer process. Ministers must work with industry to speed up the rate at which buildings are being checked, clarify which buildings are in scope and correctly prioritise them.
Shadow Secretary of State for Housing, Thangam Debbonaire has written to Robert Jenrick about the EWS form and delays to remediation. Shadow Minister for Housing and Planning Mike Amesbury recently challenged the Government in the Commons to address the situation: https://twitter.com/mikeamesburymp/status/1313158369667153921?s=21
Further guidance and legal advice is available from the Leasehold Advisory Service here: https://www.lease-advice.org/.
My Labour colleagues and I will continue to press the Government for action on this situation.
Full text of Lord Greenhalgh response dated 1 October 2020:
Thank you for your email of 15 September to the Rt Hon Robert Jenrick MP on behalf of your constituent, [[REDACTED]], about the EWS1 form. I am responding as Building Safety Minister.
I would like to thank you for writing in on this important issue. I appreciate the difficult distressing position that many leaseholders have found themselves in through no fault of their own.
I am aware that concerns about cladding and external walls systems have had an effect on the mortgage valuation process. The Government is working with industry to understand the scale of the problem. Since December last year, mortgage valuation surveyors have been able to use the EWS1 form produced by the Royal Institution of Chartered Surveyors (RICS) to manage valuations on high-rise residential buildings. The EWS1 form is not a Government document, and there is no agreement between Government and RICS stating that a building owner must produce an EWS1 form.
I am also aware that this form is now being used across industry as part of the valuation process, and that some lenders are requesting RICS EWS1 forms for all properties, which is not what the form was designed for.
We recognise the difficulties that some homeowners are facing, and we are working with the lenders to support a proportionate approach. We do not support a blanket approach to the use of EWS1 forms on buildings and ask that common sense is used. There is other evidence that can prove a building is safe, and we expect lenders to accept this for valuations.
Not all lenders require the EWS1 form for buildings under 18 metres, but we are aware that some lenders are requesting the form for lower rise properties – when they shouldn’t be. If a building is under 18 metrres you should not need the form, unless there are exceptional circumstances.
I held a roundtable with mortgage lenders in June, where lenders agreed that nuanced, proportionate approach to risk was required. They are reflecting this in their policies and guidance to valuers. At a further roundtable in July, some lenders said they would be open to other evidence of the likelihood for the value-affecting building safety matters. We are helping lenders to understand this in greater detail.
This is having an impact on the demand for EWS assessments, We are working urgently with professional bodies, looking at ways we can increase the capacity in the sector to carry out assessments where they are genuinely needed.
Officials at my Department will also work with colleagues at the Home Office and professional bodies such as the Insistution of Fire Engineers, the Fire Sector Federation and the Fire Industry Association to ensure there is a pipeline strategy to ensure this essential work can be scaled up, at pace.
We are also aware that many construction professionals have experienced challenges in accessing adequate Professional Indemnity Insurance. This has been a particular concern for fire engineers who are crucial to assessing fire safety both in historical and new high-rise residential buildings. The insurance industry has recognised this as an issue and we are considering potential solutions.
Finally if your constituent/s needs support engaging with their freeholder or managing agent, the Leasehold Advisory Service (LEASE) can help. LEASE provides independent, free, initial advice to leaseholders to ensure they are aware of their rights and are supported to understand the terms of their leases. More information on LEASE, including how to contact the serivce for advice, is available here: www.lease-advice.org.
Thank you again for your email and I hope your constituent finds this information useful.
Full text of Financial Conduct Authority response dated 7 October 2020:
Dear Ms Foxcroft,
RE: FCA Enquiry (Case Ref: ZA31599)
Thank you for your email on 4 of September 2020 to Christopher Woolard. I am replying as the FCA’s interim executive director of Strategy and Competition. I am very sorry to hear of your constituent’s concerns and I can appreciate the stress they are under as they look to remortgage or sell their properties.
The Royal Institution of Chartered Surveyors (RICS), the Building Societies Association and UK Finance have put in place the ESW1 process to help ensure lenders and valuers have the information they need to value properties in high-rise blocks.
Property valuations are an important part of the home buying process. When considering whether to offer a mortgage, lenders will consider commercial factors including the ability to sell the property and the price that might be obtained. This is a vital part of their consideration of the risk involved in any loan. Given known issues with assessing the fire safety of certain high-rise buildings, it has proven more difficult to value properties. While not a legal requirement on firms, the ESW1 form is an attempt to address this issue so lenders can make informed judgements on whether and how much to lend.
Your constituents could consider using a mortgage intermediary to help in identifying different lenders’ approaches, as they will have a detailed knowledge of the wider mortgage market.
I am sorry that this is likely to be a disappointing reply.
Interim Executive Director of Strategy and Competition