New fire safety certificate to unlock UK high-rise flat market
New fire safety certificate to unlock UK high-rise flat market Banks and surveyors move to tackle post-Grenfell concerns and revive apartment sales The fire in Bolton’s Cube building in November has increased concerns about the safety of high-rise buildings © Peter Byrne. Apartment blocks more than six storeys high will need to pass new fire safety checks before the flats can be bought and sold, in an initiative aimed at tackling post-Grenfell fire concerns, which resulted in thousands of homes being valued at zero. Surveyors and banks on Monday set out plans for a new fire safety certificate for external walls, aiming to enable sales of high-rise flats to resume after many were made unsaleable by valuers’ fire safety worries.
The safety of tall buildings, especially those covered with cladding, became an issue after the Grenfell Tower fire of 2017, which killed 72 people after the blaze spread rapidly on the building’s facade. However, industry figures said the new process, which will not be a legal requirement, left a number of questions unanswered, including whether insurers would be prepared to provide personal indemnity cover for experts carrying out the checks. The process is also likely to uncover genuine fire safety flaws in some apartments: for example, an academic study recently found high levels of flammability in a popular type of cladding that is not covered by the government’s programme for replacing dangerous materials. It has put aside £600m for the removal of aluminium composite cladding — the type used on Grenfell Tower — from buildings.
Thousands of home sales have been stopped since the government put out new fire safety advice a year ago, with surveyors unwilling to attach value to high-rise apartments without expert certification that they comply with the latest advice. Instead the homes have been valued at zero, preventing owners from selling or borrowing more money against their properties.
Workers remove cladding from a building in Manchester following the Grenfell Tower fire © Paul Ellis/AFP John Baguley, tangible assets valuation director at the Royal Institution of Chartered Surveyors, said: “To unclog areas of the market, a qualified and experienced fire safety expert will be appointed by the building owner to provide a report on the buildings cladding, and associated wall system, as an additional part of the valuation process. “This will ensure safety, and will also ultimately allow the high rise property market to function properly. “The new process was devised by Rics, working with the Building Societies Association and UK Finance, which represents lenders. Martin Boyd, chair of the campaign group Leasehold Knowledge Partnership, said: “We very much welcome this move forward by the sector in the absence of progress by the government on these matters.” But he added that there was still a shortage of fire engineers to certify buildings. Nigel Glen, chief executive of the Association of Residential Managing Agents, said insurers — who have become increasingly wary of fire risk — would need to provide workable levels of personal indemnity insurance for assessors. “If the PI insurance market does clam up then the assessors won’t be allowed to assess,” he said. He added that some freeholders may not be contractually allowed to pass the cost of the certificates on to leaseholders, leaving a question of whether they will be prepared to pay. Mr Glen called for the government to extend its £200m fund for cladding replacement in privately owned buildings to help tackle what may be widespread safety problems. Recommended Anjli Raval Growing up with Granny is an antidote to the loneliness epidemic Ray Boulger, senior mortgage technical director at John Charcol, said fire safety worries had resulted in “a significant addition to the number of ‘mortgage prisoners’” in England. Some 266,000 English households live in privately owned flats in buildings 18m tall or more, according to the English Housing Survey. Tighter regulations are applied above 18m because it was once the highest that fire safety equipment such as wheeled escape ladders could reach — although such equipment is no longer used. The valuation problems have also raised questions over banks’ existing mortgage books. Bank of England guidelines say lenders should regularly monitor the valuations of properties that they secure loans against, particularly if “the market is subject to significant changes in conditions”. However, a person familiar with mortgage policy at a “big four” high street bank said it had not adjusted the values of homes held as collateral against its existing mortgage book. This was because it would be hard to work out how many mortgages were affected unless customers applied for new loans. “We couldn’t necessarily go through our back-books [to check which properties have cladding] because the questions weren’t asked at the time” the mortgages were taken out, he said.
Article Source – https://www.ft.com/content/a779bc6a-1ceb-11ea-9186-7348c2f183af