RICS is aiming to have the guidance implemented by 5 April 2021, but the key to whether this makes any difference is if the lenders buy into it and actually ask for fewer EWS1 forms.
This may be wishful thinking and it is not something we are currently seeing. In fact, we are seeing clients being asked for EWS1 forms on all sorts of buildings, so this is not going away, it is becoming even more prevalent.
Outside the form itself, and the attitude of lenders, questions remain around external wall build-ups that may require costly remedial works, the costs of which may lead to significant service charges and/or a reduction in property value and therefore lender security.
“We are seeing clients being asked for EWS1 forms on all sorts of buildings, so this is not going away, it is becoming even more prevalent”
Short of the government legislating that certain remedial works will not be required, which is extremely unlikely, the work will need to be carried out and the bill will end up being paid by somebody. This will be reflected in property values.
It should also be noted that the guidance will not be relevant to the fire risk assessments that will be required by the proposed Fire Safety Bill, which are expected to apply to buildings of all heights and will be subject to a different code of practice or criteria of assessment. Fire Safety Bill/Act assessments, which will be required periodically, are likely to be of more interest to lenders and insurers in the long term.
Overall, while RICS and the government may want the scope of EWS1 forms to be more limited, lenders are still within their rights to ask for the forms and are likely to continue to do so.
This guidance is welcome, but it is just that – guidance. Unless lenders agree, the need for EWS1 forms, to indicate that a building’s external walls are not going to require costly remedial works, isn’t going away any time soon.
Michael Wharfe, partner, Devonshires