The Statement of UK Finance on invalid or outdated External Wall System 1 (“EWS1”) forms should have a major impact on unblocking the housing market for leaseholders in high rise buildings, writes Matthew Davies, Trainee Solicitor in our Litigation & Dispute Resolution Team and member of our Building Safety Group.
Formed on 1 July 2017, UK Finance is the British trade association for the UK banking and financial services sector, representing over 300 firms in the UK providing credit, banking, markets and payment-related services.
In its statement published on 24 April 2025, UK Finance has set out that certain lenders have pledged not to require wholesale reviews of buildings affected where there is an invalid EWS1 form or where an EWS1 form is approaching its five-year expiry date.
EWS1 Forms
Following the Grenfell Tower fire in 2017, there was an immediate focus on removing aluminium composite material (ACM) from high-rise buildings as well as other types of combustible cladding. In December 2018, the Government published guidance for building owners on steps to tackle combustible materials on the external walls of high-rise buildings. Owners were advised to check “general fire precautions” and ensure external wall systems were “safe”.
In 2019, lenders began to seek assurance on the safety of external wall systems as a condition of approving mortgage applications. There was concern that flats in high-rise blocks would not represent good security and owners could be liable for remediation costs. As a result, an increasing number of mortgage applications were rejected, and sales started to fall through.
In response, the Royal Institution of Chartered Surveyors (“RICS”) led a working group with the aim of agreeing a new standardised process. As a result of this RICS and UK Finance devised the EWS1 form, to outline safety materials. This put stringent requirements on landlords by imposing on them a duty to complete the form, adding additional cost and time to the process. This was exacerbated by a shortage of qualified building safety surveyors available to carry out the assessments. Prior to the implementation of the Building Safety Act 2022 (“BSA”), if an EWS1 form had not been completed, lenders would not consider providing a mortgage on the property.
The EWS1 process agreed by the industry in December 2019 was described at the time as an: “Industry-wide valuation process which will help people buy and sell homes and re-mortgage in buildings above 18 metres (six storeys).”
The criteria was subsequently amended in 2022 to residential blocks comprising of at least 5 storeys from ground floor upwards or at least 11 metres in height from the ground floor to the finished surface level of the top storey of the building, i.e. those buildings deemed to be “relevant buildings” for the purposes of the BSA.
As it was originally anticipated that buildings with defective cladding would have been remediated within five years from 2019, forms were nominally given a 5-year life as it was anticipated that buildings with defective cladding would have been remediated within this timeframe.
The EWS1 was created to assist in mortgage valuations of individual leasehold properties. Lenders increasingly required an EWS1 before they would consider lending, slowing the market due to issues with finding qualified personnel to undertake the survey and the length of time it took.
UK Finance’s Statement of December 2022
In December 2022, six major lenders (Barclays, HSBC, Lloyds Banking Group, Nationwide Building Society, NatWest and Santander) signed a UK Finance statement on cladding (accessible here), confirming they would consider mortgage applications on impacted buildings before they had been remediated so long as the property was subject to a developer or government remediation scheme, or covered by the leaseholder protections under the BSA as evidenced by a Leaseholder’s Deed of Certificate.
This reduced the need for EWS1s to help satisfy mortgage applications with the major lenders (around 75% of the market) pledging to not require receipt of EWS1 Forms. The details of those lenders which do still require receipt of an EWS1 Form can be ascertained by refence to The Lenders’ Handbook.
UK Finance’s Statement of 24 April 2025
The more recent statement from UK Finance, published on 24 April 2025 and accessible here, signifies a widening and increased openness by lenders to consider lending if EWS1s are not in place. The same signatories to the original statement of December 2022 pledge the following:
- No requirement of wholesale reviews of EWS1 Forms which are more than 5 years old to help ensure that the market for flats in affected blocks continues to operate without friction; and
- Where there is an invalid signatory of EWS1 forms, the lender signatories to the original statement further pledge not to require wholesale reviews of affected EWS1 forms. Lenders may consider alternative evidence about the remediation status of a building and whether the lease is a qualifying lease under the BSA.
This most recent statement was drafted in light of numerous cases of surveyors signing off EWS1 Forms without checking the content adequately and former Chartered Surveyors being struck off the professional register as a result. In the event of a Chartered Surveyor being struck off the professional register, any forms signed by that individual were deemed as an invalid signatory, requiring the process to be restarted. In addition, EWS1s that were more than five years old were also deemed invalid. Considering that many were introduced in 2019, this has been starting to become a very real issue, as many EWS1 Forms are soon to be reaching their five-year anniversary.
This updated statement further reinforces an additional leniency by the major lender signatories that if an ESW1 form has not been completed, alternative evidence such as Leaseholder Deeds or Certificate or PAS 9980:2022 Fire Risk Assessment of External Walls will be accepted to consider the remediation status of a building and whether the lease is a qualifying lease under the BSA.
The significance of the statement from UK Finance cannot be underestimated. Taking this commonsense approach by reducing the strict criteria and smoothing the process will have a big impact on the market. It will be reassuring for leaseholders to know that their assets can still be sold without relying on the completion of EWS1 Forms, which has resulted in significant delays and the subsequent blocking of the market.
If you have a query concerning how you may be affected by the UK Finance statement, then please contact our expert Building Safety Group by emailing [email protected] or if you wish to resolve a dispute concerning fire safety or structural defects then please contact our Litigation & Dispute Resolution Team by contacting [email protected] or call 020 7631 4141 and ask to speak to a member of the team.
