On 31 March 2022, the lending and valuation industries published a joint statement on cladding to clarify the current lending position for properties where the EWS1 form or equivalent assessment recommends remediation (A3 or B2 rating).
We welcome this joint statement from the lending and valuation industries with our usual cautious optimism. This is a drastic move away from mortgage providers’ previous risk-averse approach of not lending on any properties until full remediation to remove dangerous materials had been carried out. While we agree wholeheartedly with the notion that owners and/or prospective buyers of flats should have confidence that the properties they own or wish to buy are safe, we remain concerned that certainty in the flat sales market, and certainty that innocent leaseholders can finally move on with their lives, is still some way away.
We have now passed the extended end-of-March deadline set by Michael Gove for a fully-funded remediation plan and there is still no clarity on whether this will be a comprehensive solution for all buildings or yet more of the piecemeal measures we have suffered for nearly five years since the Grenfell Tower tragedy. The Secretary of State’s morally wrong decision to ensure many leaseholders will still be on the hook for non-cladding costs, and the refusal by Chancellor Sunak to agree to commit forward funding to buildings, even only as a form of interim financing, means the ongoing uncertainty about how all buildings will be made safe is set to continue.
This joint announcement may appear positive, but we are very concerned about whether the 178-page PAS9980 standard will truly provide a consistent and proportionate approach to risk assessment or whether it will be open to interpretation in practice. The well-intentioned but misguided 2020 Consolidated Advice Notes may now be withdrawn; however, the Fire Safety Act requires building owners to consider external wall fire risks in buildings of all heights with two or more separate dwellings, and PAS 9980 contains no minimum height restrictions. The risk-averse landscape seems set to continue with detailed intrusive assessments likely to be the default option due to the unsafe state of the residential built environment in the UK. One of the major issues is the lack of building documentation, particularly “as-built” fire strategies, so we fail to see how a simple visual assessment will ever be sufficient to satisfy building owners and fire experts of the safety of residents.
What of those buildings where an A3 or B2 EWS1 assessment has already been received? Will they now be reassessed and, if so, how? What of those leaseholders in buildings below 11 metres who are still being wilfully ignored by the Government as it continues to minimise the scale of this crisis so as not to spook the housing market further? As Charles Roe of UK Finance told the LUHC Select Committee in February, a number of impacted leaseholders in those buildings are facing significant costs and the market should work for all.
Given the external wall safety risks being identified in buildings of all heights, the requirement for intrusive internal assessments is now commonplace with a wide range of non-cladding safety risks being identified – we have long called for a holistic risk-based assessment approach that extends beyond external walls, yet none has been forthcoming. The Government has still failed to respond to the January 2020 Consultations on the “Review of the ban on the use of combustible materials in and on the external walls of buildings” and “Risk Prioritisation in Existing Buildings” – in January 2021, UK Finance called on the Government to release the Feedback Statement on the latter Consultation, yet this is still being kept hidden.
The Government has repeatedly refused to take control of this crisis with a continued preference to tinker around the edges and rely on industry, a strategy that has brought nothing but misery to innocent leaseholders. We remain concerned that these seemingly positive announcements will not lead to a decisive and comprehensive solution that will truly make all buildings safe on the ground at pace and restore confidence to the market, as promised by Mr Gove.
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