Advice on building and fire safety and mortgages for leaseholders

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We’ve put this guide together to help explain how the Government’s building safety advice is affecting leaseholders and how we as your property manager will be responding to this.

Thousands of properties across the UK have been impacted by the change in Government advice regarding building safety, making it difficult for a large number of homeowners to secure mortgages. Many lenders are now requesting what is known as a ‘statement of compliance’, a certificate that needs to be signed by an independent qualified professional advisor recognised by Government.

The core issues are that there is a shortage of capacity in the industry, meaning the undertaking of surveys and assessing buildings is often taking a long time. Where further action and remediation of buildings is needed, residents are currently exposed to costs for this and a solution for this issue has not yet been found.


Over the last few years, we have seen new Government advice introduced for residential buildings both in terms of fire and building safety.

However, we recognise that this changing advice is having significant consequences for building residents – including their ability to secure mortgages, exposing homeowners to high costs required to survey and remediate buildings.

Advice for multi-storey, multi-occupied residential buildings

Since June 2017 the Ministry for Housing, Communities and Local Government (MHCLG) has published advice relating to building safety.

In January 2020 this was consolidated into a single document: Advice for Building Owners of Multi-storey, Multi-occupied Residential Buildings. This advice asks building owners to review the design, installation and composition of the structure of external wall systems. It covers the materials used and also how facades were put together. It also discusses the certification of the methods taken and procedures followed during construction.

Initially, this requirement was applied to all properties over 18 metres (roughly 5 or 6 storeys). However, the more recent consolidated advice has extended this to all residential buildings where external wall systems are in place including:

  • Wooden cladding/boarding
  • Balcony structures
  • Balcony decking

It is estimated that tens of thousands of buildings in the UK are affected by this issue in some form.

Keeping residents safe

Regular fire risk assessments have been undertaken to understand and manage safety risks, acting on any findings.

The Government proposes that buildings should now be assessed in line with new standards. The number of buildings affected across the UK, and the comprehensive nature of the works that needed to meet the new criteria, is creating challenges for both homeowners and those responsible for managing these buildings.

Impact on mortgage lending

Some mortgage lenders are refusing mortgage offers unless the building owner could demonstrate that the entire external wall system complied with new Government advice. This is usually requested by a ‘statement of compliance’, which is sometimes also referred to as a safety certificate or more recently as an ESW1 form.

The certificate needs to be signed by an independent qualified professional advisor who belongs to one of 21 professional bodies recognised by MHCLG. It cannot be provided by either the building owner or the property manager, resulting in a national shortage of suitably qualified fire engineers.

Challenges to securing a statement of compliance

Obtaining the information being requested by some mortgage lenders in line with Government advice is a national challenge affecting properties across the UK. Where certificates cannot be provided based on existing information, producing a report to satisfy the requirements of the Government advice requires time and money to cover the resource of specialist advisors.

When a specialist fire engineer is asked to confirm compliance with the advice, they will normally conduct an invasive test of a building, taking samples of external wall materials and assessing the construction of the entire external wall system. This is typically a combination of construction supports, insulation and external-facing materials.

In some cases, the building can be certified as compliant, but in many cases, further testing may be required. Once intrusive survey works are completed, this does not guarantee that the statement of compliance can be provided. The complex nature of building structures means that in many cases further investigative work can be required, or remediation may be needed to retrospectively ensure the building meets the requirements of the new Government advice.

The increase in mortgage lender requests for statements of compliance, and the need for statements and compliance to be signed off by a specific group of suitably qualified advisors have created a backlog of work across the country. This situation is even more challenging following the further changes to guidance in January 2020 to now cover buildings below 18 metres.

The expertise required to produce a report also requires a high level of professional indemnity insurance, which is further narrowing the pool of advisors available to do this work.

Introduced in December 2019, the External Wall Systems 1 (ESW1) form, provides a standardised system for buildings to be certified, making the process quicker and simpler. Unfortunately, the EWS1 form has not proven to be the solution that was hoped for and has only removed the requirement for physical and intrusive inspection in a very small proportion of cases.

Next steps

A large number of homeowners nationwide are finding it difficult to mortgage, re-mortgage or sell their properties as a consequence of this situation. As property managers, we understand this is creating huge concerns and personal challenges.

Working together with many parties, we are trying to find a practical solution both to ensure buildings have the appropriate safety measures and to supply a statement of compliance wherever possible.

In the absence of an EWS certificate, a mortgage lender may apply a £0 rating to the value of a flat to halt the mortgage administration process.

The DCLG, the Association of Residential Managing Agents (ARMA), the Royal Institute of Chartered Surveyors (RICS) and the Institute of Residential Property Managers (IRPM) have formed a cross-industry group to try to find a way forwards to the £0 rating issue with leasehold property.

ARMA have dedicated webpage where you can download additional advice leaflets and information.

We strongly advise you to visit this website and download the available advice leaflets if you are thinking of selling or re-mortgaging your leasehold property. The challenges over insufficient industry capacity to undertake surveys means that a resolution to more complicated cases could be many months away.

Please note that this will not affect every flat sale or re-mortgage; not all mortgage companies apply a £0 valuation in a flat sale situation. Additionally, not all residential blocks have combustible materials on the outside.

We recommend that residents who find themselves in this situation should contact their mortgage lender or their buyer’s lender to seek advice on how best to proceed. Different lenders have different requirements and not all mortgage providers may require a statement of compliance.

Government intervention may be needed in the majority of cases to unblock the challenges associated with applying the recent changes, guiding priorities, and paying for remediation. This is a national issue that requires a Government-led solution, but we are doing everything we can to assist customers on a site-by-site basis.

Talk to Audas

We care, we believe in action, not words and when we promise, we deliver.

Speak to me Robin Lewis on 07747 761294 or use the links below to discuss your particular requirements.