Valuing properties in high-rise buildings – an update

The ongoing issue of mortgage lenders valuing properties in multi-occupied buildings with potential safety concerns at zero pounds has been widely reported in the media recently. We understand that this presents a considerable challenge for leaseholders who are unable to remortgage or sell their homes.

The External Wall Fire Review process, developed by the Royal Institution of Chartered Surveyors (RICS) as part of a cross-industry working group in December 2019, was intended to make the process of valuing these homes simpler and more consistent. The process was specifically aimed at properties in buildings over 18m with actual or potential combustible materials in their external wall systems or on balconies.

However, we are aware that since the process was put into place, a number of issues have arisen around how it is being implemented. This includes instances where External Wall System (EWS) forms have been requested – and refused – for buildings below 18m. There have also been issues relating to the availability of the competent professionals required to carry out the checks and sign off the forms, as well as challenges around securing the correct insurance to enable them to do this.

In addition, the sector is facing wider challenges around access to funding for remediation. The £1bn Building Safety Fund provides a new channel to access funding for remedial works on buildings with non-ACM combustible cladding, but the applications procedure and criteria means that many of our members are excluded from applying, or can only apply on a limited basis – such as by claiming back costs that would otherwise have been passed on to leaseholders.

We understand this is a challenging and frustrating time for leaseholders and for housing associations, and we are working closely with the government, industry and leaseholder groups to come up with solutions to these challenges.

In particular, we are contributing to conversations on how the form is currently being applied – and the challenges that are arising – new approaches to valuing lower-rise buildings, and solutions to expedite funding for remediation on all buildings.

If you have any questions about this issue, please contact our Housing Safety team.