Is it worth doing homebuyer survey on a 20-year-old one-bed flat, Also EWS1 Form Issue

IamWood

Dear All,

I am in the process of purchasing a 20-year-old one-bedroom flat in a purpose-built block. The property looks quite new. I wonder if it is worth doing a homebuyer survey like what I did to buy a freehold property.

Your advice is appreciated.

PadreM

For peace of mind I would always get a full survey on any property - even new-build.  You're paying all that money, and while extra's annoying it's a tiny fraction of the total cost and could even pay for itself if highlighting fundamental problems that could enable you to negotiate the price down.

IamWood

Thanks. Should I go for a full structural survey as it's only £50 more expensive? Cheers 

propertyhunter

Yes get the full survey. The standard of construction has been shown to be shoddy in some purpose-built blocks following the fall out from Grenfell. Make sure it is fire safe and that no additional works are anticipated for fire safety reasons. Check it has a compliant EWS1 certificate, even if its under 18 m because RICS is mandating it, and as long as they do, some lenders will demand it even when the government tells them not to. 

You need to do your due diligence.

IamWood

Thank you. Where do I get EWS1 certificate? Through seller or surveyor? 

Thanks a lot!

propertyhunter

The EWS1 certificate is something that your solicitor should ask the vendor's solicitor about. It's the responsibility of the freeholder to obtain one where they have a legal obligation to provide one. There comes an issue when there is no legal obligation to provide one when the block is <18 m in height but the bank requests one regardless. 

If there isn't one, you're likely to be restricted with respect to the number of lenders who will lend on it. You're also taking a risk that the freeholder subsequently obtains an EWS1 after you have purchased and this identifies fire safety remediation that is required - and which you will be liable to pay for. For some people this cost has huge financial implications, and has led to bankruptcy on rare occasions. Ask your solicitor for information, as its a very complicated situation and one that is ongoing. Once you mention EWS1 they will explain it all for you. 

IamWood

Thank you very much @propertyhunter

You save my day. I didn't know that would be a problem as you can see it's my first time purchasing a flat. I called the real estate agency who claimed it was not legally required as there is no cladding (red bricks outside). I feel uncomfortable, of course, even though I plan to buy the property in cash. The unknown risk is so real.

Should I simply walk away before spending any money on it?

IamWood

Here is the block.

eddddy

Rather than going for a 'standard' survey - like a 'homebuyers survey' or a 'structural survey' - you could phone a surveyor and discuss your specific concerns and requirements.

For example...

• Are there any parts of the building which look like they may need expensive repairs or maintenance in the near future (as you'll probably have to pay a share).

• Is an EWS1 likely to result in expensive remediation

The surveyor will probably only be able to inspect most of the building from the outside - but you could also arrange for the surveyor to inspect the specific flat you are buying.


To do this, you might have to find an independent local surveyor. Bigger firms might be more inflexible and say they'll only do standard surveys that are listed on their price list.

propertyhunter

Agree with eddddy, as this will actually 'replace' the valuation that a lender would normally do (since you are a cash buyer). Essentially, my old block didn't have an EWS1 when I sold it, so the buyer's lender had two large surveyors come around (Countrywide and SDL) and do a physical inspection of the interior and exterior of the flat and building, respectively. In their professional opinion, they didn't feel as if the flat was an issue from a fire safety perspective, and were happy for my buyer to purchase the property without the EWS1. 

Looking at the photo (which for some blocks means nothing, as it's what you can't see behind the façade that matters in reality) - you appear to have no balconies and no obvious cladding spanning floors, so hopefully if you tried to sell in future, a buyer wouldn't need an EWS1 form based on RICS advice today. But, I have learnt that RICS, lenders and the government love to change the rules at any time, usually leaving leaseholders to suffer.  

If it's the first time buying a flat, check the lease terms around ground rent and service charges - your solicitor should bring this to your attention. Examine what they are, how they are set, and how they are anticipated to increase in future. Avoid doubling ground rents - your solicitor will advise why and the implications for you. At best you want them to increase against an index of inflation, if not peppercorn. Find out what the management company accounts are like too, and check whether they have a decent reserve fund or not, and whether they anticipate further increases in service charge. Also ask your solicitor to make clear any restrictive covenants - this details what you can and can't do with the property (e.g. you can't have a dog, you can't knock down a wall). 

If you love the flat, don't walk away from it - but just go into it as someone who is fully informed of what the implications could be. Knowledge is power. If its costs you £2k to get that knowledge and advice, and you decide to pull out, be thankful you didn't spend tens or hundreds of thousands to buy the place and be in a difficult position when things you didn't look at prospectively suddenly present themselves.

IamWood

Thank you very much, @propertyhunter and @eddddy. Really appreciated!

The estate agency just forwarded me the letter from the management company. The flat in question is on the 3rd floor which is 14.801m.

I am not sure this resolves the issue in any way but how do you think of it?

Thanks

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Dear [OWNER]

Please note that an EWS1 form was originally designed following Government advice regarding external wall systems on buildings above 18m and was created to ensure residential buildings over 18m tall could be assessed for safety to allow lenders to offer mortgages. Changes in Government advice in January 2020, brought all residential buildings potentially within scope.

In respect of 2-176 (Evens) XXXXXX, if you are in the process or remortgaging or selling your property and you are being asked for a satisfactory EWS1 certificate, please note that there is no legal requirement to have an EWS1 certificate given the building is less than 18 meters in height.

We have enclosed annotated drawings showing the buildings height and please feel free to share these and a copy of this letter with your mortgage provider or buyer.

Yours Sincerely,