Last month the Government announced plans designed to free some leaseholders from the grip of the post-Grenfell cladding scandal. Leasehold Property Rights expert, Mike Hansom, explains why those plans have fallen flat.
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An announcement last month by Housing Secretary, Robert Jenrick, offered the first glimmer of hope to some of the residential leaseholders caught up in the post-Grenfell cladding scandal. The Government’s decision centred on the need for a document – an EWS1 – which is the accepted way for the freeholder of a residential building to demonstrate that an external wall system has been satisfactorily assessed for safety by a suitable expert, in line with Government guidance.
The announcement potentially stood to benefit leaseholders living in medium and lower-rise buildings not exceeding 18 metres in height. It’s thought they account for around 800,000 of the estimated 4.6 million people whose properties are currently unsaleable. The Government said they will no longer need an EWS1, and lenders should presume their buildings to be safe.
Mr Jenrick said:
“While we are strengthening the overall regulatory system, leaseholders cannot remain stuck in homes they cannot sell because of excessive industry caution, nor should they feel that they are living in homes that are unsafe, when the evidence demonstrates otherwise.
“That’s why I commissioned an expert group to further examine the issue, and have already agreed with many major lenders that lower-rise buildings will no longer need an EWS1 form, and the presumption should be that these homes can be bought and sold as normal.”
But the announcement seems to have fallen flat following reports that lenders are unlikely to change their policies until the Royal Institution of Chartered Surveyors (RICS) updates its guidance on the issue. UK Finance, representing the banking industry, has said that until both the RICS guidance and the Government’s official advice is updated “lenders will continue to be guided by surveyors’ expert opinions when a EWS1 form is required for medium and low-rise blocks of flats”.
In turn, the RICS has said it cannot reconsider its position on the issue until the Government’s official fire safety advice changes, which it’s understood could take until November. Many campaigners believe this stalemate to be of the Government’s own making and could easily have been avoided if the scope of the rules requiring an EWS1 had not been extended beyond high rise tower blocks in January 2020. That move immediately prompted lenders to demand EWS1 forms from a significantly wider range of sellers, despite an expert panel concluding there is no systemic fire risk in buildings below 18 metres. The panel said that in most lower-rise blocks, repair work was unnecessary and instead, fire alarm systems or sprinklers can manage fire risks. In the meantime, however, their occupants remain in limbo.