Housing minister Christopher Pincher admitted that lenders had been using the forms more often than originally intended and that borrowers trying to access the mortgage market may have suffered as a result.
He revealed that following a meeting with minister for building safety Lord Stephen Greenhalgh, lenders had agreed “a nuanced approach to risk” was required and to review their policies and advice to valuers.
The External Wall Fire Review (EWS1) process was originally designed by Barclays Mortgages head of valuations Fiona Haggett with the intention of solving the problem of valuing properties with external cladding and allowing occupiers to move again.
However, there have been issues implementing the system.
Valuers have been limited with many unable to obtain professional indemnity insurance (PII), viewings have been backlogged by many months in some cases, while MPs branded it “slow and expensive”.
The issue has been part of the ongoing attempts by government to help address national concerns following the Grenfell Tower fire three years ago and was again raised in Parliament this week.
Pincher was responding to a written question from Shabana Mahmood Labour MP for Birmingham, Ladywood, asking what assessment he had made of the EWS1 form on allowing leaseholders to sell properties.
Pincher said: “The government is aware that some lenders are requesting valuers use the EWS1 form on a wider scope of buildings than was intended and this may be having a negative effect on the mortgage market for such buildings.
“The minister for building safety held a roundtable with mortgage lenders, who agreed a nuanced approach to risk is required.
“They are reviewing their policies and guidance to valuers on the use of the form.”
Mortgage Solutions asked lender trade body UK Finance what changes would be made and when they would be implemented.
UK Finance said it was unable to comment on private meetings.
Discussing the issue of PII cover during the Flammable Cladding Removal debate in Parliament yesterday, Pincher also noted that meetings had been conducted to help tackle that problem.
“Lord Greenhalgh has met members of the insurance industry and other fire and safety professionals,” Pincher said.
“He is investigating, at pace, ways in which this particular issue may be remedied.”