With latest data suggesting nearly 10,000 properties still require remediation, RICS Standards and Regulation Board (SRB) is taking further steps in the public interest to support lending on flats in buildings with cladding.
This positive step is possible thanks to new statutory leaseholder protections and lending industry commitments to recommence mortgage loans.
The proposed guidance supports RICS valuers to take a consistent and transparent approach in undertaking valuations for mortgage purposes on domestic residential blocks of flats.
The draft approach also guides valuers on how to take into account any agreed remediation funding and timelines when valuing blocks of flats.
The new draft guidance, now open for public consultation, is the culmination of intensive work by an RICS-convened expert working group, comprising valuers, lending bodies, conveyancers, fire engineers with input from DLUHC officials.
RICS supports voluntary early adoption of the approach set out in this guidance where lenders wish to start lending prior to formal approval by SRB.
The loss of confidence in the fire safety of blocks of flats has severely impacted the property market and leaseholders, with many still unable to sell due to the absence of mortgage finance, and, until recently, facing unaffordable costs for risk mitigation and remediation. RICS acts in the public interest, and is committed to supporting all parties in tackling this issue head on. This consultation will build on recent progress and will play an important part in restoring a fully functioning market.
Prior to this public consultation, RICS worked closely with valuers, their lender clients, government and other key stakeholders. Through the public consultation RICS encourages pro-active engagement from industry, government, leaseholder and homebuyer groups and the public to ensure all views are considered and to ensure the approach is workable in practice.
Once the consultation is complete, implementation of the guidance will be decided upon by the RICS Standards & Regulation board who will ensure it is appropriate and in the best interests of the public.
Moving forward, RICS anticipates, that with the implementation of the Fire Safety Act and the statutory protections for leaseholders against costs in the Building Safety Act, reliance on EWS1 will reduce further, with external wall fire risk assessments falling in line of the normal FRA process according to BSI PAS9980 – a standard that RICS helped to create.
