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It has been nearly three years since the Grenfell Tower tragedy. A tragedy that has had an everlasting change across the construction industry, with repercussions taking their toll on the resale market.
Across the country, over half a million people are suspected to be the owners of flats in high rise buildings that they are potentially unable to sell due to the materials that were used in the cladding. This has stalled the sales market for any high rise development that was built prior to 2018 as homeowners are unable to remortgage or sell their properties due to untested fire safety issues.
What makes these properties unmortgageable?
Most apartment blocks across the UK still feature the same combustible cladding that exacerbated the Grenfell Tower fire in West London in 2017. Lenders are standing firm and refusing to grant mortgages on any buildings with this type or “non-ACM” cladding until they have been tested and deemed safe by a qualified professional. Valuation reports have been coming back at £0, meaning people are essentially trapped in what could be unsafe homes, unable to sell.
As of December 2019, the Royal Institute for Chartered Surveyors (RICS), the Building Societies Association (BSA) and UK finance came to a mutual agreement to create new industry-wide form that will be mandatory for all buildings more than 18 meters high, relating to fire safety. The new External Wall Fire Review Process, through a form known as EWS, provides a valuation process to conducted by a suitably qualified and competent professional and confirmed using the EWS1 Form. It delivers assurance for lenders, valuers, residents, buyers and sellers. The Review has been developed through extensive consultation with a wide range of stakeholders including fire engineers, lenders, valuers, and other cross industry representatives. Buildings without these standards will not benefit from the same assurances.
For potential buyers who are looking to purchase an apartment that is still in construction, while the confusion over cladding is a worry for many existing high-rise blocks, buyers of new-builds should have the added reassurance that developers now have to be compliant to the highest standards of building safety.
All new apartment blocks that are over 18 meters in height are now banned from using any form of combustible material. As the government is now considering lowering the 18 metre height threshold to 11 metres, most developers are ensuring that regardless of height, their projects are meeting the same standards as high rise buildings. Buyers can now be sure that when purchasing a brand new property, that is will not be signed off for legal completion until a member of the local council has issued a notice that it is compliant with building regulations and has the correct EWS1 form in place.
Therefore, buying a brand new developments is the safest option in both senses of the word: 1) buyers are likely to achieve the highest capita growth, especially considering new developments are often part of regeneration schemes in areas that are continually improving making it a safe investment, and 2) new developments meet the highest safety standards meaning the likelihood of accidents is much lower. Furthermore, the increased chances of being approved for mortgages make new builds a very safe bet for investors and homeowners alike.
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