The report – Valuation of properties in multi-storey, multi occupational residential buildings with cladding – offers clarity on the situations in which an External Wall Fire Review (EWS1) form is required.

The criteria, announced today by RICS, is as follows:

For buildings over six storeys an EWS1 form should be required where:

• There is cladding or curtain wall glazing on the building or
• there are balconies which stack vertically above each other and either both the balustrades and decking are constructed with combustible materials (e.g. timber) or the decking is constructed with combustible materials and the balconies are directly linked by combustible material.

For buildings of five or six storeys an EWS1 form should be required where:

• There is a significant amount of cladding on the building (for the purpose of this guidance, approximately one quarter of the whole elevation estimated from what is visible standing at ground level is a significant amount) or
• there are ACM, MCM or HPL panels on the building or
• there are balconies which stack vertically above each other and either both the balustrades and decking are constructed with combustible materials (e.g. timber), or the decking is constructed with combustible materials and the balconies are directly linked by combustible materials.

For buildings of four storeys or fewer an EWS1 form should be required where:

• There are ACM, MCM or HPL panels on the building

It said, as a result of the consultation, the new guidance made it clear where a valuer or lender could establish the building owner had met the advice in the consolidated advice note, an EWS1 form should not be required, nor would an EWS1 form be required for a building that was over 18 metres that has a valid building control certificate in place.

RICS said safety requirements meant not all flat-owners could benefit from this measure.

While originally not proposed in the initial document that went out for public consultation, but in the light of the evidence received during the consultation, buildings of any height that have high pressure laminate (HPL) cladding and those of five stories or higher with combustible cladding linking balconies, would still need an EWS1 form.

This will provide appropriate protection for lenders and purchasers

Ben Elder, RICS’ head of valuation standards, said: “This guidance provides a framework for consistency across the mortgage valuation sector as to when an EWS1 form is required.

“We are pleased to see, from the consultation responses, that many believe that the guidance will reduce the number of EWS1 forms requested.

“We have reached our final position following very careful consideration of the evidence to ensure that buildings at higher risk of remediation work are appropriately investigated in the valuation process, to support reliable advice by valuers to their lender clients.

“With the majority of lenders in support of the guidance, we now call on all UK lenders to support the guidance and work with their valuation providers to implement.”

RICS said the guidance itself is for valuers and is not a life safety risk assessment. It is for the mortgage valuation process to determine when a valuer needs more information about whether remediation work affecting value is required

The guidance comes following consultation with valuers, leaseholders, lenders fire safety experts and government.

RICS will now work with UK government and other stakeholders to ensure the guidance is implemented by 5 April 2021.

RICS will shortly produce consumer guidance to inform buyers and sellers about the information that might be available to help them understand the risks of a property in a multi-story, multi occupancy building.

Industry response

Responding to the guidance, UK Finance and the Building Societies Association said it welcomed the clarifications and issued the following response:

“Government confirmation that it supports the guidance produced by RICS as an appropriate, risk-based and proportionate basis on which to proceed with valuation assessments, in line with the building safety Consolidated Advice Note published in January 2020 is also a welcome and necessary step for lenders.

“We anticipate that many lenders will implement this guidance, which should see the number of EWS1 requests fall. However, this is a decision for each lender to make based on their own risk appetite.

“Those buying a flat should understand that a decision made by a valuer not to require an EWS1 inspection under the new guidance is no guarantee that fire safety remediation works will not be required in the future.”