In his latest quarterly update, Alan Bevan of City Residential in Liverpool says apartment leaseholders are being preventedfrom selling their homes despite them posing no elevated fire risk. Tony McDonough reports
A measure introduced to improve building safety following the Grenfell disaster in 2017 is leaving Liverpool apartment owners in limbo – even if their properties do not pose an elevated fire risk.
When fire broke out at the Grenfell tower block in London in July 2017, it was hoped firefighters would be able to tackle it quickly. But the fire spread out of control leading to the deaths of 72 people.
Safety experts later identified the cladding on the outside of the building was not fit for purpose and, rather than resisting the fire, led to it spreading to the whole building. This led the Government to urgently look at ways of avoid future tragedies.
But, according to Alan Bevan, managing director of leading agency City Residential in Liverpool, one particular measure designed to ensure buildings around the country met necessary safety standards has inadvertently caught in its net buildings that do not pose a risk.
Mr Bevan said: “Where non- compliant cladding was identified, many buildings suddenly became potential fire hazards and leaseholders found themselves unable to sell the properties whilst having to fork out hundreds/thousands of pounds on waking watches and increased insurance costs.
“In December 2019 the RICS, mortgage lenders and other stakeholders introduced the now infamous EWS1 form. Initially this was introduced to just deal with buildings over 18m in height/with cladding but subsequent announcements by the Government in early 2020 forced lenders to reconsider their position.”
He adds that as 2020 progressed lenders tightened their criteria and began insisting on EWS1 certificates for apartments in buildings below 18m and in those with little or no cladding. A shortage of surveyors qualified to carry out the necessary surveys left leaseholders in limbo, unable to sell their properties.
In November 2020, faced with ,mounting protest, the Government announced that buildings without cladding should be removed from the requirement to have an EWS1 form and subsequently the RICS issued further update advice. However, many lenders are still insisting on the certificates.
“While the theory behind the EWS1 form was sound/sensible the way that the system has evolved has resulted in too many compliant buildings finding themselves failing the EWS1 process, resulting in leaseholders being unable to move/remortgage,” explained Mr Bevan.
In May 2020 the Government launched a £1bn fund to help pay for the cost of cladding removal but this only applied to buildings over 18m. The fund was targeted at private leaseholder buildings highlighting that they would separately support buildings in the social housing sector.
However, it became clear that this was nowhere near enough. So in February this year a further £3.5bn fund was set up for buildings over 18 storeys and a loan scheme for buildings that did not qualify.
Mr Bevan said: “In addition to the grant and the loan scheme the Government also revealed plans to tax developers over the coming years which should raise around £2bn. It will be targeted at the larger developers.
“While the support is welcome/needed the true cost of the works required to make all apartment buildings compliant could run into tens of billions. Some estimates even suggest the total bill may reach £50bn. In Liverpool, while there are relatively few 18m or higher buildings that have combustible cladding as part of their exterior many other buildings have been caught up with the whole EWS1 scandal.
“We have seen examples of buildings that are free from cladding and with very limited fire risk failing EWS1 tests due the lenders worsening view on accepting any risk whatsoever.”
There is, Mr Bevan added, “light at the end of the tunnel”. He said: “The RICS understands the problem and are keen to see a solution but must work harder with lenders to bring a sensible plan to fruition which offers existing leaseholders/owners the ability to sell/remortgage.”
In his usual quarterly market update, Mr Bevan said the market for city centre homes had “improved significantly” over the last three to four months, despite concerns about the future sustainability of city centres as a whole.