by Joshua Nutton, Trainee Solicitor
Since the Grenfell Tower Tragedy in 2017, the materials used in the external façades of buildings have come under scrutiny and particularly those of multi-storey buildings. Both new buildings and existing structures now have new standards that they must meet in order to be declared safe and therefore compliant.
Though these new requirements have been introduced with safety in mind, they have thrown up some issues for individuals looking to either sell or re-mortgage their existing property. This is due to the requirement for owners to declare to lenders what materials are present in the façade of the building that their property forms a part of (including any attachments such as balconies) and whether these materials are safe – meaning that they meet fire safety and combustibility regulations.
Understandably, most owners do not have this information to hand and are therefore having to commission an independent report by a qualified professional (at their own personal cost) in order to ascertain this information. There is the added complication that in many cases for such an assessment to be conducted, the entirety of the building must be assessed. This will require the consent of other property owners and, more than likely, the coordination of the property factor if there is one.
Until such information is provided, any valuation given for a property will be significantly lower than its market value and in some cases could even be valued at £0.
In order to alleviate these difficulties, the Royal Institution of Chartered Surveyors (RICS), the Building Societies Association (BSA) and UK Finance have produced a new industry-wide valuation process for buildings above 18 metres (six storeys). This will be used by valuers, lenders, building owners and fire safety experts in the valuation of high-rise properties, with actual or potential combustible materials to external wall systems and balconies.
The new process is called an External Wall Fire Review (EWFR) and will be conducted by a suitably qualified and competent professional – an example being a Chartered Engineer with the Institution of Fire Engineers. It will be valid for five years from the date of inspection and only one review will be needed for each building. However, if the building is altered then a new report will be required. Factors should therefore encourage owners to consent to the review being conducted in order that any sale or re-mortgage is not delayed unnecessarily.
An EWFR contains two options that are available to the assessor of the building – Option A and Option B. Option A denotes that the external wall materials are unlikely to support combustion. Within this there are further options that should be selected to give an indication of the combustibility of any attachments (e.g. balconies). Option A1 – where there are no attachments whose materials contain significant quantities of combustible material; Options A2 – an appropriate risk assessment has been conducted to confirm that no remedial works are require; Option A3 – where neither A1 or A2 apply, there may be potential costs of remedial works to attachments.
Option B denotes that there are combustible materials in the external walls of the building. If this Option applies, there are further sub-options that must be chosen from to indicate if remedial works are necessary. Option B1 – the fire risk is sufficiently low and no remedial works are required or, Option B2 – the adequate standard of fire safety has not been achieved and remedial works are required.
With regard to building standards more generally, the Building (Amendment) Regulations 2018 have been in force since 21 December 2018. These regulations ban combustible materials being present on the external façades of newly built properties; however, this does not apply where a building notice has been given or full plans have been deposited with a local authority before 21 December 2018 and building work has started before that date or begins within 2 months of that date.
With this new standardisation of the valuation process for buildings of 18 metres or more, the hope is that there should be a lot more certainty around how such buildings are to be treated by lenders. This will provide reassurance for proprietors and also give the property market itself a boost with such properties returning to the open market with the confidence that they will be able to be sold at their true value with the necessary assessments having been conducted.