The Grenfell tragedy led to the discovery that a large number of high-rise residential blocks of flats are cladded with unsafe material. Government advice initially said that cladding which represented a fire risk should be removed from all buildings over 18m in height. Unsurprisingly, mortgage lenders started to require assurances that external wall systems were safe as a condition of approving a mortgage loan.
The surveyor's professional body and the lenders produced a certificate in 2019 called an 'EWS1' certificate. The idea behind the certificate is that a surveyor would view an affected property and if satisfied as to the cladding on a building, they would sign off the EWS1 certificate and give it a 'clean bill of health'. This would then enable a lender and buyer to proceed with confidence. However, in practice there have been a number of problems with the use of EWS1 certificates including insufficient surveyors to carry out the inspections and a concern by the surveyor's indemnity insurers. In addition, it seems that lenders were requiring the certificates for buildings that were less than 18m in height and even buildings that did not have cladding.
The government made an announcement on 21 November 2020 that the certificates would no longer be required for buildings without cladding. The lenders have, to some extent, rejected this announcement and have made it clear that they are entitled to be satisfied that a property does not represent a fire risk before they lend on it. Some high-rise buildings have presented fire risks due to additions such as wooden balconies.
This difficulty and confusion has left people owning flats in affected buildings in a position where it is becoming increasingly difficult to sell their property. It is also very important for anyone looking to buy a flat to take specialist advice to ensure that they are not left with a property that they cannot mortgage or sell in the future. There is no 'quick fix' to this problem and it is likely to require government intervention to resolve it.
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