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Help with mortgage lenders and building safety (EWS1)

Buying & selling your home

1. Changing advice on building and fire safety and mortgages for leaseholders

This guide for residents explains the effect that the Government’s building safety advice is having on leaseholders, and how FirstPort – as the property manager – is responding to these. It includes an explanation of the Government’s Building Safety Fund and how we are supporting applications to this.

Changing Government advice about building safety is impacting thousands of properties across the UK, making it difficult for a large number of homeowners to secure mortgages as many lenders are now requesting what is known as an EWS1 form, or ‘certificate of compliance’. This certificate needs to be signed by an independent qualified professional advisor recognised by Government.

In June 2020, the Ministry for Housing, Communities and Local Government launched a £1billion Building Safety Fund to help pay for works to upgrade or replace external wall systems where these do not comply with the latest guidance. FirstPort is now working to progress applications for many of our developments on behalf of residents.

The fund is welcome progress to help address uncertainty and reduce financial worries for many residents across the UK. However, the scale of the challenge means that there remain concerns over whether the funding can feasibly cover all the costs required.

Alongside others within the industry, as well as action by MPs, FirstPort is seeking support from Government to unblock these challenges.

2. Background

Over the last few years we have seen new Government advice introduced for residential buildings both in terms of fire and building safety. At FirstPort we work hard to ensure the safety of our residents and we have been supportive of these steps.

However, we recognise that this changing advice is having significant consequences for  residents – including impacting their ability to secure mortgages and exposing homeowners to high costs required for surveys and remediation.

3. Advice for multi-storey, multi-occupied residential buildings

Since late 2018 the Ministry for Housing, Communities and Local Government (MHCLG) has published a series of advisory notes relating to building safety.

In January 2020 this was consolidated into a single document: Advice for Building Owners of Multi-storey, Multi-occupied Residential Buildings. This advice asks that building owners review the design, installation and composition of the structure of external wall systems. It covers the materials used and how facades were put together, as well as certification of the methods taken and procedures followed during construction.

Initially, this requirement was applied to all properties over 18 metres (roughly 5 or 6 storeys). However, the more recent consolidated advice has extended this to all residential buildings where external wall systems are in place. It is estimated that nearly 1,500 buildings – covering over half a million individual homes – are affected by this issue in some form.

4. Keeping residents safe

The residential buildings currently managed by FirstPort were designed and signed off by the appropriate building control authority in line with building regulations at the time of their construction. Since then, regular fire risk assessments have been undertaken to understand and manage safety risks.

What has changed now is that this new advice from Government proposes that buildings should be assessed in line with new standards.

In cases where there are concerns over the structure of a building, we will look to put steps in place to mitigate risks while these concerns are investigated further.

5. Impact on mortgage lending - the EWS1 form

Many mortgage lenders now request confirmation that the entire external wall system complies with new Government advice. This is usually requested as an EWS1 form which is a standardised process developed by the Royal Institute of Chartered Surveyors (RICS) to address the issue. The term ‘certificate of compliance’ is also often used.

This EWS1 form needs to be signed by an independent qualified professional advisor who belongs to one of 21 professional bodies recognised by MHCLG. It cannot be provided by either the building owner or the property manager, meaning that the capacity of suitably qualified fire engineers nationally is limited.

In the simplest cases, an EWS1 form can be completed based on researching the plans for the building provided by the original developer.

However, often the information available is insufficient in which case an invasive test (an ‘intrusive survey’) is required – enabling samples to be taken of external wall materials and an assessment of the construction of the entire wall system (typically comprising a combination of construction supports, insulation and external-facing materials).

In some cases, the building can be certified as compliant, but in many cases further testing may be required. Once intrusive survey works are completed, this does not guarantee that an EWS1 form can be provided. The complex nature of building structures means that in many cases further investigative work can be required, or remediation may be needed to retrospectively ensure the building meets the requirements of the new Government advice.

The increase in mortgage lender requests for EWS1 forms, and the forms to be signed off by a specific group of qualified advisors has created a backlog of work across the country. This situation has been made more challenging following further changes to guidance in January 2020 to also cover buildings below 18 metres.

The expertise needed to produce a report also requires a high level of professional indemnity insurance, which has further narrowed the pool of advisors available to do this work.

As a consequence of this situation, a large number of homeowners nationwide have found it difficult to mortgage, re-mortgage or sell their properties until an EWS1 form has been obtained.

 

 

6. Meeting costs for remediation - the Building Safety Fund

In June 2020 the Government announced a new £1bn Building Safety Fund which is open for buildings over 18 metres high where works are needed to upgrade or replace complex external wall systems.

The fund is specifically targeted at buildings with non-ACM (aluminium composite material) cladding. It builds on funding already available for the removal of ACM cladding which was announced soon after this material was found to have contributed to the tragic fire at Grenfell Tower.

We worked with Freeholders to ensure any buildings we manage that are over 18 metres and might not meet the latest standards were registered for the fund (the deadline to register was 31st July 2020).

We are now working through the next stage which is the formal application process.  To proceed to the full application, registrants are invited to apply by Government once their registration has been reviewed.  Once invited to apply, additional development-specific information is submitted to allow Government to assess whether a development qualifies for financial support through the fund.  It has now been announced that the application stage will be open until 30th June 2021 and that for developments that are granted funding, remediation works must now have started by 30th September 2021.

We have a dedicated team in FirstPort to manage applications to the Government fund.

7. Addressing further challenges

The new fund will provide reassurance to many residents, but we know that for others there will still be uncertainty. The new Government Fund is intended to help cover remediation costs for non-ACM cladding on buildings over 18 metres high where works are needed to upgrade or replace complex external wall systems. However, it unfortunately won’t cover all costs incurred by fire safety measures – for example, so far support has not been extended to cover important interim safety measures like fire watches and alarm systems that are in place on some buildings until remediation can be completed.

These additional costs, and the scale of the task at hand, mean we remain concerned that the funding will not be enough to cover all costs across the country – which is likely to be significantly more than the £1 billion pledged. Challenges also remain over the availability of technical expertise and insurances required to undertake this work.

We are continuing to work with our partners in the property sector and Government to help unlock these challenges.

8. Waking Watch Relief Fund

Government has also announced a new Waking Watch Relief Fund of £30m to help pay for fire alarm systems to be installed in high-rise buildings with cladding so that interim ‘waking watch’ costs can be removed or reduced.  Further information about this Fund and how to apply is expected in January 2021.  We will continue to update impacted customers as soon as more information becomes available.

9. Getting in touch

If you are a FirstPort customer requiring a certificate of compliance, the team processing these enquiries can be reached on buildingsafety@firstport.co.uk. Please be aware that due to the volume of requests we are currently receiving, it may take around five working days for the team to respond to your message.

More details of the Government’s Building Safety Fund and how it will be applied can be found here: https://www.gov.uk/guidance/remediation-of-non-acm-buildings

We have put together a set of Leaseholder Q&As to answer specific questions you may have. You can read this here.

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Leaseholders’ Q&A – Building & Fire Safety