Real Estate

Do You Want to Sell Your Property that is Affected by The Cladding Crisis?

Combustible cladding is still a concern for British homes, even after 4 years of the terrible fire in the Grenfell Tower in west London that claimed 72 people.

As per the industry estimates, more than 500,000 people who reside in buildings in the UK that may have risky cladding materials, and many more may be indirectly impacted.

Aside from the danger to life, the cladding dilemma has made it almost impossible for many apartments to sell since mortgage lenders won’t provide them loans until their cladding has received formal approval as safe via a document called EWS1.

Although many types of buildings should benefit from new government guidance on cladding remediation in the UK, however, cladding is unquestionably still an important consideration when selling an apartment.

What can happen if I sell my property to any future leaseholders?

Any subsequent buyers of the property will automatically receive the safeguards stipulated in the Act. This means that regardless of when they purchased a property that was qualified for the protection on 14 February 2022, all subsequent owners will be protected.

Does this mean I don’t need to contribute for fire safety related work for my building?

As stated in Q3, there is a difference between fixing problems with a building’s construction or renovation and more routine maintenance and repairs that maintain your structure safe. This implies that the price of routine maintenance and repairs will still be included in your service rates.

Why is this an issue when it comes to selling?

The responsibility for proving fire safety falls on the building owner, but the necessary testing (to BS8414) is expensive and time-consuming. According to the Association of Residential Managing Agents (ARMA), the tests can take 12 to 18 months and cost up to £45,000 to complete.

Mortgage lenders may decline to make loans for properties inside a structure without certification of fire safety because their valuers assign those assets as no value.

What is the EWS1 form?

The Royal Institution of Chartered Surveyors (RICS) and the two major UK mortgage lending organisations launched the EWS1 form at the end of 2019.

Although it is not a legal requirement and is not an official government document, it does offer standardised proof that a building’s external wall system has been examined and approved by a professional surveyor, and in reality, lenders are unlikely to approve a mortgage on a damaged apartment without one.

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What should I do in case I want to sell?

What is the recommendation, then, if you wish to sell a house in a block that does not yet have an EWS1 form, but will probably need one? It will depend on how fast you would like to sell.

Unless there are special circumstances that make a speedy sale necessary, even at a significantly reduced price, we would not advise trying to market a property without an EWS1 form.

This leaves you with two choices:

  1. Stay put until the EWS1 form (and, if necessary, a work schedule) are in place,
  2. If you absolutely must relocate, renting out the property.

If you don’t have an EWS1 form, you can still do this, but be mindful that tenants may have less of a desire for properties that they could view as being less desirable.

It may take several months or longer to acquire an EWS1 inspection, but that does not mean you should wait to take action. We advise discussing your plans in advance with local agents.

They will be able to provide information on whether or not comparable homes have sold to cash purchasers and the amount of price reductions. Agents may also be able to press management companies for more details on the status of EWS1 inspections.

Speaking with agents before obtaining an EWS1 form will also enable you to act quickly after the inspection is finished. You can be the first to attract a buyer who has been waiting if you are prepared to list.

In order to stimulate interest prior to EWS1 approval, a professional agent will have a list of prospective purchasers and will be able to inform them about your property.

Move wise can analyse millions of points of sales data to find the top agents to sell any home nationally. Once the EWS1 is in place, choosing the correct agent will provide you access to the largest pool of possible purchasers and give you the best chance of closing a deal quickly.