Proposed RICS guidance aims to improve consistency in EWS-1 requests

The guidance, entitled ‘Valuation of Properties in Multi-Storey, Multi-Occupancy Residential Buildings With Cladding’, will help by setting out a consistent position for valuers carrying out mortgage valuations on when EWS-1 Forms should be requested for buildings with cladding before valuing a property to avoid unnecessary delays.

Although the guidance is intended for use by valuers and mortgage lenders, it will also provide clarity for owners/operators of buildings, fire risk assessors and others involved in properties with cladding. In terms of responses, the RICS is particularly keen to engage leaseholders, homebuyers and those that advise them (such as conveyancers).

The responses gathered from the public, valuers, lenders and other stakeholders will shape the guidance and seek to form a consensus on where an EWS-1 Form is required or not and, in turn, help balance the risks to mortgage lenders, existing leaseholders and borrowers where combustible cladding may be present on a residential building.

What the guidance will not do is act as a substitute for a life safety fire risk assessment, and neither will it advise on how to complete an EWS-1 Form.

The proposed guidance includes criteria – based on existing Government advice and developed in consultation with the fire safety sector, lenders and other stakeholders – designed to help valuers decide where an assumption can be made that remediation work, which can affect the value of the property, is unlikely to be needed and an EWS-1 Form should therefore not be required.

Proposed criteria  

The guidance includes the following proposed criteria:

*Buildings over six storeys

There’s no cladding or curtain wall glazing on the building and if there are balconies where the balustrades and decking are constructed of combustible materials (eg timber), they’re not stacked vertically above each other.

*Buildings of five or six storeys

There’s not a significant amount of cladding on the building (for the purpose of this guidance, approximately one quarter of the surface façade is a significant amount) and there are no ACM or MCM panels on the building and

if there are balconies where the balustrades and decking are constructed with combustible materials (eg timber), they’re not stacked vertically above each other.

*Buildings of four storeys or fewer

There are no ACM or MCM panels on the building.

Metal cladding and ACM/MCM are visually very similar, so if metal cladding is present, the valuer should either confirm with the building owner or managing agent in writing that any panels are not ACM/MCM, or an EWS-1 inspection should be requested.

Ben Elder, head of valuation standards at the RICS, commented: “Following the Grenfell Tower tragedy in 2017, fire safety in our built environment has rightly been under significant scrutiny both here in the UK and globally. The RICS has worked with industry to ensure properties are safe from fire risk and to produce the EWS-1 Form in order to make sure the market is moving.”

Elder continued: “Since the introduction of the EWS-1 Form, Government advice has changed, while COVID-19 has seen lending criteria reviewed. EWS-1 was never intended to hold up the market. Indeed, without it, it’s fair to suggest that non-one would be moving. However, this proposed guidance intends to help by providing valuers with clear criteria to help them decide on whether an EWS-1 Form may be required or not.”  

In conclusion, Elder stated: “Clearly, there will still be many cases where an EWS-1 form is necessary, but the guidance and insight resulting from this consultation will enable us to continue to work with stakeholders, including Government, in order to find solutions to help speed up the process for remediating these buildings.”

Final approval

The guidance note is subject to final approval by the RICS’ independent Standards and Regulation Board chaired by Dame Janet Paraskeva following on from the consultation.

Paraskeva explained: “Public confidence in the safety of buildings with external cladding systems is at an all-time low. Post-Grenfell, uncertainty about the safety of buildings with cladding systems has understandably had a significant impact on the market for affected properties. Concern over safety and potential remediation costs presents a significant challenge for those advising potential purchasers and lenders.”

Paraskeva went on to state: “Through its Independent Standards and Regulation Board, the RICS is launching its UK-wide consultation on guidance designed to help surveyors when they undertake such valuations for mortgage lending. The purpose of the guidance is to create consistency, and support Best Practice, in order to ensure that properties affected are properly identified and those unaffected by unsafe cladding are not unnecessarily impacted.”

*The consultation period opened on Friday 8 January and will close on Monday 25 January, with the proposed guidance note itself due for publication in the Spring