"It’s vital that we - as an industry - maintain a collective and transparent approach so that anyone affected is fully aware of any current and future changes and the impact on the housing market for such properties."
Measures to address the long-running cladding issue have certainly been ramped up in recent times. In December 2022, we saw the announcement from the Department for Levelling Up, Housing and Communities that more building owners will be held to account for repairs of high-rise properties thanks to a multi-million-pound expansion in council enforcement teams.
Backed by more than £8 million in government funding, local enforcement units will benefit from greater resources to pursue freeholders who are dragging their heels and refusing to begin repairs. The funding from the Department for Levelling Up, Housing and Communities will be split among 59 councils in England and prioritised for those with the highest number of unsafe buildings, particularly focused in London, Manchester and Birmingham.
December 2022 also saw the Royal Institution of Chartered Surveyors (RICS) issue updated guidance for the valuation of multi-storey buildings, which it said would bring clarity and confidence to the mortgage market. The new advice guides valuers on how to take into account any agreed remediation funding and timelines when forming an opinion on the value of properties in blocks of flats with cladding.
This applies to residential blocks in England which are five storeys or over, or 11 metres tall or more. The policy can apply to shorter properties alongside the information from the previous year’s guidance, depending on an agreement between the surveyor and the lender regarding the valuation approach.
The cladding issue has been prominent across the housing and mortgage markets for a number of years now, causing a huge degree of emotional and financial concern for all too many homeowners. Thankfully, we have seen several key developments take place over the past 6 to 12 months. These have ranged from different avenues opening up to pay for remediation works, through to the aforementioned RICS guidance which has been specifically developed to reflect the new funding streams with the intention of allowing valuing and lending to return on such property types.
But how has this guidance filtered through to the housing and mortgage markets?
Our latest webinar focused on cladding in a bid to outline the RICS guidance in more depth, especially in terms of how it will impact lending and valuing flats which have been affected by potentially defective materials. The polls undertaken during this session generated some interesting results.
When asked if this guidance has helped, an overwhelming majority of 88% said that it has had a positive impact, with only 12% responding negatively. From an educational perspective, it was also encouraging to see that 82% of respondents had heard of the new guidance prior to the webinar, with 18% saying they had no previous knowledge.
A further poll suggested that 42% of property professionals have noticed a market returning for flats, while 58% reporting that they had seen no difference in this area of the housing market.
Significant steps forward has been taken in terms of arming surveyors with the ability to value properties with building safety defects and this will certainly help to generate additional confidence for lenders and purchasers going forward.
While it’s great to see some positive solutions emerge for everyone connected to this building safety nightmare, it’s vital that we - as an industry - maintain a collective and transparent approach so that anyone affected is fully aware of any current and future changes and the impact on the housing market for such properties. And the intermediary community will continue to play a key role within this process.
