Property

Draft RICS guidance on valuation of multi-storey, multi-occupancy residential buildings with cladding – Law Society response

The proposals

The Ministry of Housing, Communities and Local Government (MHCLG) issued guidance in January and November 2020 after the Grenfell fire and other fires in residential buildings.

The guidance greatly expanded the scope of properties that may require an EWS1 (external wall fire review) certificate.

This consultation was prepared by the Royal Institution of Chartered Surveyors (RICS) following the publication of the MHCLG guidance.

The consultation is primarily for response by valuers, but we welcome the opportunity to provide some general comments on these proposals.

Our view

This consultation is important to our members as it encompasses a suggested solution to the current stasis in some parts of the residential property market affected, or potentially affected, by some types of cladding.

The lack of availability of EWS1 certificates is creating delays in the buying and selling of properties.

Because there are chains of linked transactions, the impact on the market is multiplied if a single transaction is unable to proceed because of a lack of a certificate.

If valuers’ decisions under these new proposals turn out to be incorrect, there will be an impact on buyers arising from:

  • the continuing lack of clarity for liability for remediation works
  • the potential building safety risks, and
  • the impact on value

This means there’s a need for better information for buyers so that they fully understand the risks of proceeding without an EWS1 where the property might be caught by the guidance or any subsequent guidance.

We agree that, as the consultation document sets out, ensuring a standardised approach to the issuing of EWS1s is crucial.

Equally, consumers need to be informed in a consistent manner about the risks they are assuming.

We would welcome discussions about the content of any guidance or information RICS can suggest for prospective buyers.

Next steps

This consultation closed on 25 January 2021.

We would welcome discussions about the content of any guidance or information RICS can suggest for prospective buyers.

Read the consultation on the RICS website

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