Building Safety: Update

A look at the issues currently in the headlines concerning building safety and cladding

Building Safety

Investigations carried out in the months after the Grenfell Tower fire showed that the aluminium composite material (ACM) used in the building’s cladding had contributed to the spread of the flames.  At the end of 2018, the government took steps to require local authorities and housing associations to remove and replace ACM cladding from their high rise social housing buildings, the government making funding available for this.  The government also gave authority to councils to remove ACM cladding from private residential buildings and reclaim the costs from the building owners.  The ban on combustible materials in new residential buildings over 18m tall also came into effect.

The government established the Building Safety Programme which, as well as carrying out investigations into ACM and remediation, covers assessments of safety risks to other high-rise buildings.  The government also presented the draft Building Safety Bill to Parliament in July 2020.  This proposes a reform of the regulatory system for building control and safety in England, and also creates a Building Safety Regulator.

Government Funding and costs to leaseholders

As stated above, the government made funds available for the removal of ACM cladding for social housing and private residential housing.  In the March 2020 budget, the government launched the Building Safety Fund to support the remediation of unsafe non-ACM cladding on buildings 18 metres and over, in both the private and social housing sectors.  The deadline for making such applications is 30 June 2021.  The application has to be made by the building owner and if successful, it enters into a grant funding agreement.  Once the funds are paid, the remediation work can commence, the Ministry of Housing, Communities & Local Government monitor progress and cost .  All leaseholders have to be informed of the process throughout. 

The Building Safety Fund does not provide the solution to all the issues faced by leaseholders and their landlords.  First, the Fund is not available to buildings under 18m in height.  Instead, the government is providing a system of long-term low-interest loans.  Secondly, the Fund does not currently cover all works required to make a building safe from fire, eg. wooden balconies without fire breaks.  The shortfall in these costs will have to be met by the leaseholders if there are not sufficient service charge reserves.

Leaseholders also face increases in buildings insurance to cover interim safety measures, such as waking watch wardens.  Buildings with dangerous cladding are required to have fire marshals patrolling the building to look for signs of fire.  The cost of funding these marshals is being paid by the leaseholders through the service charge.  The government announced a Waking Watch Relief Fund in January 2021 to pay for the installation of alarms to remove or reduce the reliance on a waking watch in residential buildings of over 17.7 metres in height with unsafe cladding.  This fund is not currently available for buildings in Greater London; the Greater London Authority, who will be administering this element of the fund, has not yet determined when it will be available. 

The EWS Scheme

The EWS (External Wall System) Scheme was introduced in December 2019 by RICS to support the valuation process for high-rise residential buildings with cladding by requiring the completion of a certificate (EWS1 Certificate) essentially confirming a satisfactory cladding position ( or identifying if remediation is  needed).

The introduction of the EWS Scheme led to huge delays and difficulties for leaseholders who want to sell or re-mortgage their flat.  One of the reasons for the delays is due to the shortage of qualified assessors.  The government are attempting to resolve this issue by making funding available to RICS to deliver training, which was due to commence in January 2021.  Another reason for the delays is the issue of availability of professional indemnity insurance for assessors and surveyors.  Many insurers have withdrawn from providing cover, and others have imposed much more stringent limits and higher rates.  Again, the government has acknowledged this is an issue, and has said it is working towards a state-backed indemnity scheme for qualified professionals.  However, no timeframe for this scheme has been announced. 

In November 2020, the government issued a press release stating that owners of flats in buildings without cladding would no longer need an EWS1 form to sell or re-mortgage their property.  However, it will not be until RICS have issued their updated guidance on the valuation of these flats that fire safety bodies, and ultimately lenders, will formally support this.

Next steps

There is a lot of detail and guidance to be published by the government in support of their recent announcements.  The coming months will also hopefully see the updated RICS guidance on the EWS1 scheme, as well as debate over the Building Safety Bill.