Mortgage lenders need more information before changing EWS1 approach

Mortgage lenders are not planning to change their lending practices in the short term following the government’s announcement that External Wall Fire Review Forms (EWS1) forms should no longer be required for blocks of less than 18 metres in height.

Several lenders have told Housing Today there will be no immediate change to their approach while they wait for updated guidance from the government and the Royal Institution of Chartered Surveyors (RICS). This is despite housing secretary Robert Jenrick hailing his July announcement as a “significant step forward for leaseholders” struggling to sell homes due to the fire safety crisis.

The EWS1 forms, created by RICS to improve fire safety information after Grenfell, have been blamed for created widespread difficulties in getting homes valued and mortgaged.

The government has confirmed it will remove its Consolidated Advice Note (CAN), which recommends EWS1 forms are used on all blocks. Jenrick said this paved the way for a more ‘proportionate approach’, and called on lenders to ‘show leadership’ by ending their requirement for EWS1 forms on blocks of less than 18m in height.

However, research by Housing Today found a lack of consistency and clarity among lenders over their approach, with most sitting tight for more information and updated guidance.

A spokesperson for Coventry Building Society spokesperson hinted at current confusion. It said once the government has withdrawn its CAN and RICS has updated its guidance “borrowers and lenders should be in a clearer position” . Lloyds also said RICS’ updated guidance should provide the certainty everybody needs. Virgin Money said it is “unable to commit to a timescale for any change.”

HSBC said that once the government’s CAN is removed, given the support from the Institution of Fire Engineers, it will no longer require the EWS1 forms on smaller buildings. Barclays said it will rely on the normal statutory process for blocks of flats having an up-to-date fire risk assessment”

Nationwide has taken its own approach. It said it has agreed with the government that once Fire Safety Act risk assessment requirements come into force later this year it will no longer require EWS1 forms on buildings under 18 metres.

UK Finance, which represents mortgage lenders, said once the government has removed CAN and all documents, including RICS guidance, is updated “borrowers and lenders should be in a clearer position and know what is expected of them, and firms will be able to update their lending processes.”

A spokesperson added: “Lenders will continue to be guided by surveyors’ expert opinions when a EWS1 form is required for medium and low-rise blocks of flats.”

Those waiting for changes to RICS guidance are likely to be waiting a while however. A RICS spokesperson said any changes would be “developed through a consultative process.”

Valuers JLL and Savills have hinted at further barriers to swift action. They said in a statement in June that a lack of trained assessors and a failure by housing associations to provide necessary information meant that in some cases it was difficult to value properties.

See also: How are lenders responding to the government’s EWS1 form announcement?