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MPs demand action on EWS after banks ‘ignore’ new RICS guidance
A cross-party group of MPs have urged the government to act after discovering that leaseholders are being asked for External Wall System 1 (EWS1) forms on properties that are exempt under new guidance.
The Housing, Communities and Local Government (HCLG) Select Committee has written to housing secretary Robert Jenrick warning that high street lenders are “ignoring” industry guidance that defines when costly EWS1 forms are needed on mortgages.
The EWS1 form was introduced in 2019, aimed at unsticking the flat sale market after banks became reluctant to lend to prospective buyers due to widespread fire safety defects.
However, after new government guidance was published that called on building owners to check external wall systems for all blocks regardless of height, the homes of hundreds of thousands more leaseholders became unsaleable without the form.
The Royal Institution of Chartered Surveyors (RICS) produced more specific guidance, which the government claimed would ease the EWS1 burden on up to 500,000 leaseholders.
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But the HCLG committee wrote to Mr Jenrick on Friday, warning that leaseholders still “cannot sell or mortgage their homes, because mortgage lenders are insisting on an EWS1 form despite their properties not meeting criteria as set out in the new RICS guidance”.
It follows Inside Housing analysis from April which found that some of the country’s largest banks were failing to implement the new RICS guidance, meaning leaseholders are still having to secure EWS1 forms on exempt properties.
Clive Betts, chair of the committee, said: “As it stands the EWS1 system simply isn’t working. Industry guidance has set out which buildings don’t need the form, but it seems lenders are ignoring this and are opting not to provide finance without it.
“As ever it is the leaseholder left facing the consequences, trapped in homes they cannot sell or remortgage.”
The committee acknowledged that the EWS1 process is industry-led, but questioned what the government is planning to do if mortgage lenders continue to insist that EWS1 forms are obtained for buildings that do not meet RICS criteria.
A Ministry of Housing, Communities and Local Government spokesperson said: “Most major lenders, representing roughly 80% of the mortgage market, have said that they will adopt the RICS guidance or take a markedly less risk-averse approach.
“The updated EWS1 guidance from RICS means nearly 500,000 leaseholders should no longer need a form to sell their homes – and we continue to encourage a sensible, proportionate approach to risk.
“The EWS1 is not a government form, legal requirement or a building safety certificate and we’re disappointed if it is still being asked for in some cases where it’s not necessary.”
RICS spokesperson said: “It’s a matter for individual lenders to act in accordance with our guidelines on when an EWS1 form is required and a number have agreed to follow it, giving leaseholders more clarity when selling their homes.
“We will continue to work closely with MHCLG and the lending community to ensure external cladding assessments are required only when absolutely necessary.”
