This paper considers who's responsible for paying for fire safety works on blocks of flats in the wake of the Grenfell Tower fire.
This information should not be relied upon as legal or professional advice. Read the disclaimer.
Why was EWS introduced?
After the Grenfell Tower fire, the focus was on removing aluminium composite material (ACM) from buildings over 18 metres. Attention broadened to take in other types of combustible cladding. Government Advice Note 14 (December 2018) contained guidance for building owners on steps to take to tackle non-ACM materials on the external walls of high-rise buildings. Owners were advised to check “general fire precautions” and ensure external wall systems were “safe”.
In 2019 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 owners could be liable for remediation costs. In some cases, surveyors acting for lenders gave flats a value of £0, or significantly less than the asking price if the block didn’t have a certificate showing compliance with Advice Note 14. An increasing number of mortgage applications were rejected; sales started to fall through.
In response, the Royal Institution of Chartered Surveyors (RICS) led a cross-industry working group to consider best practice in the reporting and valuation of tall buildings within the secured lending arena with a view to agreeing a new standardised process.
The EWS1 process was agreed by the industry in December 2019 – it’s 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).”
What is the EWS process?
After its introduction, flat owners seeking to sell or re-mortgage their homes found lenders asking for an EWS1 form. They are not a statutory requirement. The information gathered is used for valuation purposes. Lenders may refuse a mortgage application where one cannot be produced – this is a commercial decision.
The EWS process involves an assessment by a suitably qualified professional who completes the EWS1 form. Full information is on the RICS website.
Ongoing issues and action to address them
Although the EWS process was devised to ‘unstick’ the market for flats in high-rise blocks, its implementation brought other problems to the fore. On 21 November the Government announced changes to help long leaseholders. Further announcements followed on 21 July 2021 and 10 January 2022 (see below).
1. Which blocks need an EWS1 form?
RICS’ initial guidance said the process applied to residential buildings in scope above 18m in height. Not all high-rise blocks needed an EWS1 form “only those with some form of combustible cladding or combustible material on balconies.” RICS said some lower buildings might be in scope if combustible materials/balconies represented “a clear and obvious danger to life safety”.
The Government’s consolidated Advice Note of January 2020 (now withdrawn) said, “The need to assess and manage the risk of external fire spread applies to buildings of any height.” Flat owners in blocks lower than 18 metres reported lenders requiring EWS1 forms.
On 21 November 2020 an agreement between RICS, UK Finance, the Building Societies Association and Government was announced such that an EWS1 form was no longer needed for sales or re-mortgages on flats in blocks with no cladding. Supplementary guidance on fire risk assessments was issued on 21 November 2020 (now withdrawn).
RICS issued a new guidance note on 8 March 2021 which took effect from 5 April 2021. The guidance lists circumstances where an EWS1 form should be required and says:
…where a valuer or lender can establish that the building owner has met the advice in the consolidated advice note, an EWS1 form should not be required, nor would an EWS1 form be required for a building that is over 18 metres that has a valid building control certificate in place.
The guidance says some lower-level blocks will still need an EWS1:
…in the light of the evidence received during the consultation, buildings of any height that have high pressure laminate (HPL) cladding and those of five stories or higher with combustible cladding linking balconies, will still need an EWS1 form.
There were reports of lenders insisting on EWS1 forms despite blocks not meeting criteria in the RICS guidance.
On 21 July 2021, the Secretary of State referred to expert advice which found “no systemic risk of fire in blocks under 18 metres.” The Government press release said “EWS1 forms should not be requested for buildings below 18 metres” and said some major high street lenders had agreed to review their practices on blocks under 18 metres based on the new advice.
RICS carried out a review of its guidance and on 10 December 2021 said its role was to safeguard the public interest and the guidance needed to stay in place:
This is so that purchasers do not risk finding themselves trapped in flats of any height because potentially crippling costs are ignored and passed unwittingly on to them, which so many current owners have discovered too late.
On 15 July 2022, the largest mortgage lenders said, subject to their normal policy requirements, “they will be able to lend on any property that is part of a developer or government remediation scheme or properties that are protected by the new statutory protections, as evidenced by a qualifying lease certificate.”
On 6 December 2022 RICS published new guidance on the valuation approach for properties in residential buildings with cladding which came into force immediately. RICS says the guidance:
…is intended to help valuers undertaking valuations for secured lending purposes on domestic residential flats, within residential blocks of 5 or more storeys or 11 metres or more tall. In accordance with the remediation schemes and qualifying lease protections, applicable to England only (this approach will be updated to reflect remediation arrangements and schemes in Scotland and Wales once published), as set out by Government.
In the Q&As published with the new guidance RICS said lenders were “overwhelmingly supportive” of the approach adopted during the consultation process.
2. Will Publicly Available Specification (PAS) 9980: 2022 help?
On 10 January 2022 the Government withdrew the January 2020 consolidated Advice Note and associated documents. The Government supports updated guidance from the British Standard Institution (BSI) “to help fire risk assessors take a proportionate approach to the assessment of walls and avoid wholescale cladding replacement where safe to do so.”
Publicly Available Specification (PAS) 9980 came into effect on 19 January 2022. This guidance should be used where a detailed assessment of the external walls of existing multi-storey, multi-occupied residential buildings is required.
However, it’s not an alternative to the EWS1 form, which is used for valuation purposes. On 10 January 2022 the Secretary of State was asked if EWS1 forms would end. He said:
On EWS1 forms, we can dramatically reduce their use as a result of the engagement that we have with lenders and with RICS. Again, it will still be the case that, in the meantime—even as we get a more proportionate approach—there will be some 11-to-18 metre buildings where work of that kind will be required, but we absolutely want to reduce it.
The EWS1 form was revised (PDF) on 23 February 2022. The form says investigations should be carried out in accordance with PAS 9980 guidance “which allows for the possibility of mitigation as an acceptable investigation outcome”.
3. Shortage of experts
There is a lack of qualified professionals to carry out assessments and complete EWS1 forms. The 21 November 2020 announcement included Government funding of almost £700,000 “to train more assessors, speeding up the valuation process for homeowners in cases where an EWS1 form is required.” The training has been delivered by RICS since January 2021. The funding is for 2,000 additional assessors.
4. Professional Indemnity (PI) insurance
The insurance industry was reluctant to offer PII to professionals completing EWS1 forms. On 21 July 2021, Lord Greenhalgh said a Government-backed PII scheme would be launched “for qualified professionals conducting external wall system assessments.”
The state backed PII scheme for qualified professionals conducting fire risk appraisals on external wall systems to complete an EWS1 form for residential properties over 11 metres launched on 26 September 2022.
5. Can an EWS1 be required on a block under 11 metres?
This is a commercial decision for a lender. RICS says “A valuer should always have a rationale to justify the request for the EWS1 form, which may be the lenders requirements.” The guidance issued on 6 December 2022 says:
For residential blocks and/or flats, 4 storeys or fewer or under 11 metres, the principles contained within this professional standard may be applicable along with the information set out in RICS’ Valuation of properties in multi-storey, multi-occupancy residential buildings with cladding, 1st edition. A surveyor should confirm the valuation approach with their client prior to commencement of the instruction.
My right honourable friend the Minister for Housing was clear that leaseholders in buildings below 11 metres should write to my department should they find that their freeholder or landlord is commissioning costly remediation works….Your Lordships can be assured that I will bring my full weight to bear where landlords are looking to carry out works that are not needed or justified.
6. What happens after the EWS1 is completed?
There are five possible results from an EWS assessment. Category A applies where buildings have external wall materials that are unlikely to be combustible. RICS says A1 and A2 findings “are not likely to lead to any further action.” An A3 finding means remedial work may be needed on attachments to the external wall, such as balconies. Category B applies where combustible materials are clearly present. A B1 rating means the engineer has decided the fire risk is low, and no remedial work is required. A B2 finding means there isn’t an adequate standard of fire safety and remedial work/interim measures are required.
- Library briefing: Leasehold high-rise flats: who pays for fire safety work?
- RICS EWS FAQS
The Commons Library does not intend the information in this article to address the specific circumstances of any particular individual. We have published it to support the work of MPs. You should not rely upon it as legal or professional advice, or as a substitute for it. We do not accept any liability whatsoever for any errors, omissions or misstatements contained herein. You should consult a suitably qualified professional if you require specific advice or information. Read our briefing for information about sources of legal advice and help.
Following the fire at Grenfell Tower, this paper sets out the events and commentary around the fire, the relevant building regulations, fire safety laws and housing standards, the Government response to the fire, the responsibilities around re-housing, and previous concerns raised with fire regulations.
A quick guide to getting advice and information on common leasehold issues.