On the 10 January 2022 the Government withdrew the Consolidated Advice Note (CAN), which had led to the development by the RICS of the EWS1 Form. What does this mean for valuers and lenders who previously required EWS1 Forms?
Following the Grenfell Tower tragedy in 2017, lenders began to seek assurance on the safety of external wall systems as a condition of approving mortgage applications. There was concern that flats in high-rise blocks wouldn’t represent good security and that owners could be liable for remediation costs.
Development of the EWS1 Form
In December 2018, the government published Advice Note 14 (AN14). This was intended to provide clear guidance for building owners on the steps to take with regards to flammable materials on the external walls of high-rise buildings.
The stance taken by most valuation surveyors considering AN14 was that as long as dangerous cladding remains on a building with no certificate showing that it complies with Advice Note 14, the flats within that block had a value of £0 or well below the original asking price. As a consequence an increasing number of mortgage applications were rejected and sales started to fall through.
In response, the Royal Institution of Chartered Surveyors (RICS) led a cross-industry working group. It's purpose was to consider best practice in the reporting and valuation of tall buildings; with a view to agreeing a new standardised process.
This culminated in the EWS1 process, which was agreed by the industry in December 2019 and described as an :
“industry-wide valuation process which will help people buy and sell homes and re-mortgage in buildings above 18 metres (six storeys).”
In January 2020 the Government issued the Consolidated Advice Note (CAN) which set out ;
“The need to assess and manage the risk of external fire spread applies to buildings of any height.”
This extended the requirement for an EWS1 form to flat owners in blocks lower than 18 metres.
What next for EWS1 Forms
In January 2022, Michael Gove announced the withdrawal of the CAN. As the original requirement for an EWS1 survey derived from the governments various advice notes culminating in the CAN, will this affect the need for EWS1 forms?
The short answer is No.
EWS1 Forms and Valuation
There are two reasons for this. Firstly, it is important to remember that the EWS1 form reports any effect on the value of a building with cladding. It has nothing to do with life and fire safety risk.
This point was set out succinctly in evidence to the Levelling Up, Housing and Communities Committee on the 2nd February 2022, as follows :
‘…lenders need to make sure that householders and purchasers have a property that is safe to live in, what lenders are concerned with, as well as life and fire safety, is valuation risk. It is not in anybody’s interest for a lender to advance funds to somebody to purchase a property only to find out later down the line that they may face a cladding remediation bill of £40,000 or £50,000. That would affect their ability to repay their mortgage, or to afford any unexpected costs that come through.’
This view was confirmed by the Interim Chief Executive of the Royal Institution of Chartered Surveyors.
‘…we think that the EWS1 form and process will continue for as long as there continue to be concerns about high-rise buildings being unsafe. PAS 9980 quite rightly introduces a much broader fire safety assessment process, but that’s actually much lengthier and will take more work to complete. So, we think that the slightly simpler process—the EWS1 process, which looks at cladding—will continue and that is for the benefit of all parts of market. I think it has broad support from lenders, valuers and conveyancers.’
EWS1 Forms and PAS9980
The second reason that EWS1 Forms will still be required is the introduction of new guidance from the BSI, called PAS9980. PAS9980 introduces a much broader fire safety assessment process, called an FRAEW.
The purpose of an FRAEW is to assess the risk to occupants from a fire spreading over or within the external walls of a building; and to make a decision as to whether, in the specific circumstances of the building, remediation or other mitigating measures to address the risk are considered necessary.
PAS9980 applies to multistorey buildings of any height; contradicting a previous Government announcement that there is no systemic risk of fire in blocks of flats under 18 metres. See our previous article highlighting the risk to lower rise buildings. PAS9980 also applies to :
- Student accommodation
- Sheltered and other specialized housing; and
- Buildings converted into flats
However, an FRAEW is not an alternative to an EWS1 form. An EWS1 is used for valuation purposes, an FRAEW is not. According to PAS9980 Clause 4g whilst an FRAEW can be used as a suitable report to support or inform an EWS1 form, it does not replace it.
So, no change to the requirement for EWS1 Forms any time soon.
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For the latest RICS guidance note ‘Cladding for Surveyors, 1 Edition, March 2021‘ click here
Our FAQs page is a compilation of many of the questions we are frequently asked about the Fire Risk Assessment process. We have updated our FAQs following new RICS guidance in March 2021.
For further information on External Wall Assessments see our EWS1 Fact Sheet.
For the latest on the Fire Safety Bill, see our News article.
Please call our EWS1 Enquiry line to commission an EWS1 Survey 020 4534 3130
To commission an EWS1 Form, an FRAEW or a Fire Risk Assessment (FRA) please call 020 4534 3130.
For further information on PAS9980, EWS1 forms or advice in respect of your obligations as a building owner, developer or manager, please contact :
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