Buying a flat in a building with an A3 rating on EWS1 survey

[Deleted User]

Hi all,
I've been interested in buying a 1 bed flat for nearly 2 years now. I was about to buy and had exclusivity on the flat when COVID hit. The landlord then subsequently put it on the open market and the place has not sold in the past 6 months which surprised me (in my mind I thought they'd be tons of people wanting to buy, as the first time it was sold it had 4 offers after 1 viewing day). I know this is due to a combination of the EWS1 survey issues, COVID, the fact its a 1 bed in central London, and the fact that EWS1 survey-issues aside, the flat needed more specialist lenders (the lift doesn't go up to the floor it is on). 

In May of last year I was sent the EWS1 Survey for the building which rated it '       A3 – Where neither of the above two options apply, there may be potential costs of remedial works to attachments'. I was also sent a 'Fire Risk Assessment Report' done in late 2019 which had various ratings.

Can anyone help me with information on:

• When is it known how much the costs for leaseholders would be to cover remedial works under an A3 listed building?
• Is there any pending law (after the recent billion £ fund announcement) that would lower these costs?
• Is it now in general possible to get a mortgage for a A3 rated building? Where does the risk lie?

Thanks! 

numbercruncher8

I know someone with A3. This I think implies that the building itself is safe but there is something that may require fixing (in this case, balcony).

Unless you have a crystal ball it isn't going to be possible to know how much the costs are, or when. That's down to when the freeholder and what needs to be done. 

Of all the flats affected I think these have the least priority. For the flat I referred to earlier the chances of the balconies contributing to some kind of disaster seems quite remote. So thus I think unless the government change their minds, I also think the chances of this being covered are also remote. 

You could speak to a broker to find out who lends.

The risks appear variable to me in that you have an unspecified amount of work that may, or may not be done in the future, and the cost may or may not be large. I don't know if the involuntary loan scheme applies to non-cladding work.

Unless there is a decent discount on offer, surely there must be something else you can look at. What the price was and the demand profile was in the past is somewhat irrelevant now as so much has changed. 

[Deleted User]

The top of the building has these big balconies that are wood...so I think that's it. It would take quite a lot of time and money to remove that. 

Ultimately, who is responsible for the cost of removing it? 

NameUnavailable

[Deleted User] said:

The top of the building has these big balconies that are wood...so I think that's it. It would take quite a lot of time and money to remove that. 

Ultimately, who is responsible for the cost of removing it? 

As things stand, you are responsible to pay for it, even if your own flat doesn't have a balcony it will be charged to you under the service charge (if you buy the flat).

NameUnavailable

In addition to the EWS stuff new fire regulations mean that most blocks will also need 'upgrading' to comply, which is a totally separate thing and there's no limit to what a freeholder can ask each leaseholder to pay for this work.

annetheman

[Deleted User] said:

Hi all,
I've been interested in buying a 1 bed flat for nearly 2 years now. I was about to buy and had exclusivity on the flat when COVID hit. The landlord then subsequently put it on the open market and the place has not sold in the past 6 months which surprised me (in my mind I thought they'd be tons of people wanting to buy, as the first time it was sold it had 4 offers after 1 viewing day). I know this is due to a combination of the EWS1 survey issues, COVID, the fact its a 1 bed in central London, and the fact that EWS1 survey-issues aside, the flat needed more specialist lenders (the lift doesn't go up to the floor it is on). 

In May of last year I was sent the EWS1 Survey for the building which rated it '       A3 – Where neither of the above two options apply, there may be potential costs of remedial works to attachments'. I was also sent a 'Fire Risk Assessment Report' done in late 2019 which had various ratings.

Can anyone help me with information on:

• When is it known how much the costs for leaseholders would be to cover remedial works under an A3 listed building?
• Is there any pending law (after the recent billion £ fund announcement) that would lower these costs?
• Is it now in general possible to get a mortgage for a A3 rated building? Where does the risk lie?

Thanks! 

• When is it known how much the costs for leaseholders would be to cover remedial works under an A3 listed building?

A3 is bad, it's basically a fail because the building needs remediation work; similar but not as bad as a B2. This explains why no one wants to buy it, the cost could be anything from £30,000 to £125,000 - per flat.
Most remediation bills I've seen are around £40,000-60,000. But it really depends on what the freeholder/management company decide to get fixed and who they ask to do it.

• Is it now in general possible to get a mortgage for a A3 rated building? Where does the risk lie?

The unknown cost is the reason you will a) find it very difficult if not impossible to get a mortgage and b) service charge may increase (insurance and possible but unlikely for an A3 interim measures).

• Is there any pending law (after the recent billion £ fund announcement) that would lower these costs?

No, cladding fund is a joke. It covers removal of cladding only from building over 18m in height only. If a building requires remediation of cladding, you can bet your bottom dollar there will be other issues beneath the cladding. Most common are missing fire breaks, lack of compartmentation and flammable insulation.

There is absolutely no building out there that has mineral wool insulation, fire breaks correctly installed, correct compartmentation, and only flammable cladding. 

So those people will still have to pay £10,000s for everything else that is wrong with the building; scaffolding alone will cost millions on a high rise.

If the building is <18m, a loan will be given capped at £600 per year to fix the cladding only. Similarly, all other costs still to pay in full for.

These are developer faults and the govt is basically bailing them out with a tiny slap on the wrist. It's total corruption, from the corrupt Jenrick, a complete disgrace - expect more on this but with Tories in power for another 4 years, it will likely be slow progress.

annetheman

I forgot to add that the balconies must be very wood-y to warrant an A3, or there is more to be remediated - read the FRA carefully and ask the seller to ask the management company ASAP, though they are not known for being forthcoming with such info.

My building got a B1 due to wooden balcony decking - flammable material present but risk of life is low enough not to require remediation.

If the balconies are stacked and floor to ceiling wood, then I get the A3 but if just the decking, that's surprising.

[Deleted User]

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