A Birmingham property management company has welcomed a major UK government intervention that means leaseholders “trapped” in flats due to the cladding crisis could soon be able to sell or remortgage their properties.
Principle Estate Management said the news from Housing Secretary Robert Jenrick that additional EWS1 safety forms – designed to give assurance for lenders, valuers, residents, buyers and sellers – will no longer be needed for buildings under 18 metres will help to ease the pressure on the housing market.
Concerns over the safety of cladding were raised after the 2017 fire at Grenfell tower in which 72 people died, but a government-commissioned review found there was “no evidence of systemic risk of fire in blocks of flats”, citing evidence that suggested only 9 per cent of blazes were in blocks of flats of four storeys or more.
The review also found that for buildings of that size, just 7 per cent spread beyond the room where it started, adding there were 10 fatalities in blocks of flats over four storeys out of 176 fire-related deaths in 2020.
Andrew Winstanley, the property operations manager at Principle, said: “This paves the way for EWS1 forms to no longer be required for buildings below 18 metres and will help further unlock the housing market.
“This intervention will hopefully reduce the needless and costly remediation in lower rise buildings and restore market confidence allowing flat owners to buy, sell or re-mortgage their homes.
“It’s excellent news that a group of major high street lenders has already committed to review their practices following the new advice.
“The fact that major lenders such as HSBC UK, Barclays, Lloyds and others have said they are supportive of this position will be a great relief for leaseholders who until now have felt trapped in their homes.”
In a written ministerial statement and a speech to MPs, Mr Jenrick said the review brought forward five recommendations to stop what he called the “disproportionate reaction” of lenders to the cladding crisis.
These include removing the need for an EWS1 form on buildings below 18 metres, but in the “small number of cases” where there are concerns, these should be dealt with through “risk management and mitigation”.
Mr Jenrick added there should be “a clear route for residents or leaseholders to challenge costly remediation work and seek assurance that proposals are proportionate and cost-effective”.
The Housing Secretary said the Government should “work with the shadow Building Safety Regulator to consider how to implement an audit process to check that fire risk assessments are following guidelines, not perpetuating the risk aversion we are witnessing, in some instances, at the present time”.
He added: “Fire risk assessors and lenders should not presume that there is significant risk to life unless there is evidence to support this. This would ensure that they respond only to the evidence and adopt a far more proportionate and balanced approach.”
On the reasoning behind the proposals, Mr Jenrick said there had been “extreme risk aversion” in the housing market in recent years as a result of concerns about the costs of replacing cladding.
In his statement, Mr Jenrick detailed wider reforms, saying: “It is my expectation that these actions will significantly ease the challenges faced by the vast majority of leaseholders looking to buy or sell flats in high-rise buildings and ensure that leaseholders do not face huge bills for unnecessary remediation works.”
Mr Jenrick later told MPs he wants “rip-off” waking watches to be brought to a close “as quickly as possible” except in the most exceptional circumstances.
The update came as the House of Commons considered the Building Safety Bill, which gives a new building safety regulator powers to prosecute rule-breaking developers and take their properties off the market.
The legislation is part of plans to strengthen regulations for high-rise buildings and avert a further tragedy such as the Grenfell Tower blaze.
Shadow housing secretary Lucy Powell accused Mr Jenrick of treating the Commons with “contempt” by releasing details of the new announcements during his speech given MPs have spent weeks preparing for the Bill’s second reading debate.
She said: “We support the majority of what is in the Bill, which at last strengthens regulation of high-rise buildings – although it could go further.
“However, we do have serious concerns about what is not in the Bill. It abandons those leaseholders already trapped in the building safety crisis, and we will seek every avenue to provide cast-iron legal guarantees that have long been promised.”
The Government has previously committed to fund the cost of replacing unsafe cladding for all leaseholders in residential buildings of 18 metres and over in England, and announced a £5 billion investment in building safety.
The introduction of a new levy and a tax will also ensure that industry pays towards the costs of cladding remediation.
Conservative Stephen McPartland (Stevenage) called on the Government to provide support to protect leaseholders from the “devastating mental and financial costs” of historic fire safety defects”.
He said: “Leaseholders are drowning under mountains of debt in properties they cannot sell, they cannot remortgage and are going bankrupt right now.”
Joy Morrissey, Conservative MP for Beaconsfield, also cautioned that the Government is “blocking” its own voters from moving up the housing ladder by not addressing cladding problems.
The Bill later received an unopposed second reading and will undergo further scrutiny at a later date.