Changing advice on building and fire safety and mortgages for leaseholders
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.
Some of this advice is impacting building owners and residents both in terms of how their buildings are run but also how mortgage lenders are assessing leasehold apartments. Our advice for residents explains a number of the complex consequences of the Government changes, and how FirstPort – as the property manager – is responding to these.
Advice Note 14
In December 2018 the Ministry for Housing, Communities and Local Government (MHCLG) published Advice Note 14 (AN14). The note asks that building owners review the design, installation and composition of the structure of external wall systems. It covers the materials used and also how facades were put together, as well as certification of the methods taken and procedures followed during construction.
Importantly these requirements apply to all properties over 18 metres (roughly 5 or 6 storeys).
Since the publication of AN14, further advice notes have also been published relating to specific materials including High Pressure Laminate (HPL), external balconies and window panels.
AN14 applies to the entire residential sector in the UK, affecting thousands of tall residential blocks. It is estimated that the number of buildings affected could be between 3,000 and 9,000.
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, including acting on any findings.
What has changed since these buildings were signed off is that this new advice from Government proposes that buildings should now be assessed in line with new standards. The number of buildings affected across the UK, and the comprehensive nature of the works that can be needed to meet these new criteria, is creating challenges for both home owners and those responsible for managing these buildings.
FirstPort’s response to AN14
FirstPort is supportive of the safety measures being brought in by the Government. However, we also understand the challenges these are causing for residents. Following the publication of the advice note, FirstPort has sought to undertake checks of buildings it manages against the requirements of AN14. As property manager, FirstPort’s role is typically to coordinate activity to secure this information but in all cases we are reliant on other parties to do so.
This exercise has largely been undertaken through desktop research and reviewing the original paperwork available relating to the construction of the building. In many cases, detailed drawings and specifications are either no longer in existence or were not handed over following construction. Even when documentation is available, this cannot be guaranteed to verify the nature of the structure against the new standards now being set by Government.
Impact on mortgage lending
This research was overtaken in late summer 2019 when some mortgage lenders began to refuse to offer mortgages unless the building owner could demonstrate that the entire external wall system complied with AN14. This is usually requested in the form of a ‘certificate of compliance’
This certificate 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.
Challenges to securing a certificate of compliance
Obtaining the information being requested by some mortgage lenders in line with AN14 is a national challenge affecting properties across the UK. Where certificates cannot be provided based on existing information, producing a report to satisfy the requirements of AN14 requires time and money to cover the resource of specialist advisors.
When a specialist fire engineer is asked to confirm compliance with AN14 they will normally conduct an invasive test of a building, taking samples of external wall materials and assessing the construction of the entire external 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 the certificate of compliance 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 AN14.
The increase in mortgage lender requests for certificates of compliance, and the requirements in place for the certificates of compliance to be signed off by a specific group of suitably qualified advisors has created a backlog of work across the country. The expertise required to produce an AN14 report also requires a high level of professional indemnity insurance, which is further narrowing the pool of advisors available to do this work.
As a consequence of this situation, a large number of home owners nationwide are finding it difficult to mortgage, re-mortgage or sell their properties – creating huge concerns and personal challenges.
Many parties, including FirstPort, have been actively working to find a practical solution both to ensuring buildings have the appropriate safety measures and to supplying a certificate of compliance wherever possible. While positive steps are being made, there is no easy way forward. In particular, the challenges over industry capacity to undertake surveys means that a resolution to more complicated cases could be many months away.
We are recommending that residents that find themselves in this situation contact their mortgage lender or their buyer’s lender to seek advice on how best to proceed. Different lenders have different requirements and not all mortgage providers may require a certificate of compliance.
If you are a FirstPort customer requiring a certificate of compliance, the team processing these enquiries can be reached on email@example.com. 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.
Common questions and answers
Q: What is AN14 and what is a certificate of compliance?
A: In December 2018 the Ministry for Housing, Communities and Local Government (MHCLG) published Advice Note 14 (AN14). This guidance states that building owners should hold documentation on the design, installation and management of the structure of external wall systems. It covers the materials used and also how facades were put together, as well as certification of the methods taken and procedures followed during construction. A certificate of compliance is a document referred to within AN14 which is created to demonstrate that a building is certified in line with the Government Advice. This documentation is being increasingly requested by mortgage lenders following the publication of the advice.
Q: Is my building safe?
A: 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. The number of buildings affected and the comprehensive nature of works that can be needed to fulfil new criteria is creating challenges for home owners and those responsible for managing complex buildings across the UK. In cases where there are concerns over the structure of the building itself, we will look to put steps in place to mitigate risks while these concerns are investigated further.
Q: Why is so hard to get a certificate of compliance / why is the information not available?
A: As the Government guidance around AN14 is new, information being requested by mortgage lenders will not always have been documented and held by building developers in the past. While in some cases it is possible to retrieve this information – for example from original developers’ plans and construction records – in many cases this detail does not exist or is not easily accessible. It is also worth noting that when your development was built, building standards for external wall systems would have likely been different to those described and required by the Ministry of Housing Communities and Local Government in AN14.
Q: Can FirstPort advise on mortgage lenders that are not raising queries around AN14?
A: We are not able to provide financial advice to leaseholders so cannot advise on which lenders to approach regarding your mortgage. Our experience is that a number of mortgage lenders are seeking clarification around building certification as a consequence of the latest Government guidance, but that different lenders hold different requirements.