Risks of buying a flat with an EWS1 A1 rating?

Mr_owl

GDB2222 said:

Mr_owl said:

This pretty bad. I have read carefully latest guidance from RICS and I strongly believe that building shouldn't require it. However I am too well aware that cautious lender may want to see the ews1 form before making ana offer.  I wonder how long this crisis gonna last as it surely weighs negatively on flats values. I am worried this could be a potential money pit.

If you’re a seller, EWS1 is a nightmare, and you are right that it’s potentially a money pit if your block is unsafe. If you’re a buyer, it’s a Godsend, hopefully protecting you from buying into an unsafe block that’s going to be a money pit to put right. 

I am a buyer but if the block I am looking to buy is required to have it signed off then each and every flat in the UK would be afected too. This would obviously mean I have to give up on a flat purchase and somehow stretch to buy a freehold house and this would prove very difficult due to budget constraints given the location where my work is. I wanted to avoid higher than 85% ltv and minimise risk of being turned down by the lender if I asked for too much.

 I could always go further afield but this would mean a nightmare and costly commuting. Relocation is also possible but this is never as straightforward as it seems and poses a lot of risks.

Crashy_Time

Just means the price of flats has to come way down from present levels.

Mr_owl

@Crashy_Time
They are already struggling in many parts of the country and are somewhat discounted to begin with and one would think buying now a flat would mean a steady growth in value over the next couple years lets say 4-6 years and in the meantime getting over the ews1 crisis. This is a gamble that many are not prepare to take. I am aware some smaller, presumably older buildings might already be exempt from it and in fact not being affected at all as there is no dangerous cladding, no flammable balconies whatsoever but still it' is slightly worrying given that latest government update was some 2 months ago. Unfortunately for many this is the only option to own a property.

niceguyed

If something was overpriced to begin with then a discount does not automatically mean it is good value. There's no real way to say whether a building is exempt unless it already has an EWS1. Given how hot the market is (except flats) I'm not sure why you think there would be a steady growth in value? 
I completely understand budget may dictate a flat is the only property type in reach but on the flip side not owning a depreciating asset in a block that may needed millions of pounds worth of work that could bankrupt you doesn't seem like Kirsty and Phil property dream either. 
I'm not saying this is you, but sometimes on these forums people are desperate to buy whatever the cost. 

katie91_2

Depends on the building; we own a flat in a grade II listed converted mill, it’s entirely brick construction and has no cladding, balconies etc. It has an A1 rating and as flat buildings go, its probably the safest you can get. I still wouldn’t trust the government not to change the regulations however after seeing how they’ve dealt with this fiasco.

Mr_owl

niceguyed said:

If something was overpriced to begin with then a discount does not automatically mean it is good value. There's no real way to say whether a building is exempt unless it already has an EWS1. Given how hot the market is (except flats) I'm not sure why you think there would be a steady growth in value? 
I completely understand budget may dictate a flat is the only property type in reach but on the flip side not owning a depreciating asset in a block that may needed millions of pounds worth of work that could bankrupt you doesn't seem like Kirsty and Phil property dream either. 
I'm not saying this is you, but sometimes on these forums people are desperate to buy whatever the cost. 

Absolutely good point and I don't think there will be any growth given that there are some many uncertainties regarding safety. However if bought at the moment and assuming the crisis will be soon over. For example a new directive or law is passed this potentially can benefit the market and enhance desirability and help the value grow in the long term. I will try to talk to solicitors whether they were able or planning on getting to the bottom of the problem checking a particular property.

 If whatever reason the building will have anything to do with the ews1 I think I am going to pull out as I am by all means no desperate to own anything and certainly can't afford to own a mortgaged depreciating asset. 

NameUnavailable

katie91_2 said:

Depends on the building; we own a flat in a grade II listed converted mill, it’s entirely brick construction and has no cladding, balconies etc. It has an A1 rating and as flat buildings go, its probably the safest you can get. I still wouldn’t trust the government not to change the regulations however after seeing how they’ve dealt with this fiasco.

We have still to see what the fire safety bill entails for all blocks - could still be significant expense to bring older blocks 'up to date'.

I'm looking at a flat in a 3 storey 70's built block at the moment - I'm thinking it's not going to need any EWS rating given the construction/age but maybe it will, who knows.

Mr_owl

NameUnavailable said:

katie91_2 said:

Depends on the building; we own a flat in a grade II listed converted mill, it’s entirely brick construction and has no cladding, balconies etc. It has an A1 rating and as flat buildings go, its probably the safest you can get. I still wouldn’t trust the government not to change the regulations however after seeing how they’ve dealt with this fiasco.

We have still to see what the fire safety bill entails for all blocks - could still be significant expense to bring older blocks 'up to date'.

I'm looking at a flat in a 3 storey 70's built block at the moment - I'm thinking it's not going to need any EWS rating given the construction/age but maybe it will, who knows.

I feel your concerns. Is there a way of checking 100% whether actual building will be exempt or not? My understanding is if it's deemed exempt then it ews1 should never be a worry.

niceguyed

Mr_owl said:

NameUnavailable said:

katie91_2 said:

Depends on the building; we own a flat in a grade II listed converted mill, it’s entirely brick construction and has no cladding, balconies etc. It has an A1 rating and as flat buildings go, its probably the safest you can get. I still wouldn’t trust the government not to change the regulations however after seeing how they’ve dealt with this fiasco.

We have still to see what the fire safety bill entails for all blocks - could still be significant expense to bring older blocks 'up to date'.

I'm looking at a flat in a 3 storey 70's built block at the moment - I'm thinking it's not going to need any EWS rating given the construction/age but maybe it will, who knows.

I feel your concerns. Is there a way of checking 100% whether actual building will be exempt or not? My understanding is if it's deemed exempt then it ews1 should never be a worry.

I covered this in my previous answer. RICS issue guidance on when an EWS1 should be requested. The guidance is not statutory. If lenders want it they'll ask for it, whether RICS guidance considers it "exempt" or not. 
So RICS may consider a block should be exempt and a valuer may not. One valuer may come to a different conclusion than another valuer on the same block. 
So either you go for a flat with an existing EWS1 a lender is happy with or go for a flat and hope the valuer doesn't ask for one because they don't believe it falls into scope of the RICS guidance. 
If you're looking for certainty in the current situation you'll be in a for a long wait I'm afraid as it's still an absolute disaster.

Owleyes00

Wait and see what is outlined in the Queen’s Speech as well in relation to these issues. I’m not convinced you will hear what you want to given how poorly the govt have handled it so far but they are due to announce legislation regarding building safety so it might give you some clarity either way.