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EWS1 FORMS - WHY DO LENDERS REQUIRE THESE?

The process of obtaining an EWS1 form may have begun when your Mortgage Lender's Valuer requested that a form is provided as part of the lending process, the reason for this is quite simply because Lender's are taking on a risk to their money and as such like to know the extent of potential risk.


If you think of it like this. A Mortgage Lending is basically purchasing a property, albeit you'll occupy that property until you repay the loan. As such should you default on the loan, the Lender may have to sell the property to recover their money and costs. As such they have various factors which affect their lending decision, one of those is risk.


If a property (flats in this case) have an unkown risk, unknown that is at the time the Mortgage Valuer inspects the property, then the Lendor will need to quantify that risk so they can decide not only whether to lend money against that particular property, but how much it may cost to mitigate that risk.


In the case of external wall cladding systems (EWS) until firstly the risk is confirmed, i.e. an EWS1 consultant inspects the property, the Lender does not know if a risk is actually present. Hence why the Mortgage Lender's Valuer will request the EWS1 form. Once requested a Competent Surveyor can inspect the building and ascertain if there is an actual risk. Bearing in mind, it's not simply about visible cladding you can see externally but could also include risks of fire spreading due to materials contained in the cavities, balconies, etc... The EWS1 Surveyor will determine if there's a risk associated with combusible materials, if so they will highlight this in the EWS1 form. From that point further research and investigations, possibly involving specialists such as Fire Engineers, Cladding Installation Companies, etc.... may be involved to quantify that risk.

By quantify the risk we essentially mean that the cost of remdediation works is calculated. Remediation works could include removal of cladding or any measure deemed required to sufficiently reduce the risk to an acceptable level. Once the risk is known and quantified, as necessary, the Mortgage Lender now knows the potential impact upon their lendind decision and can decide whether to continue to lend monies and if so what amount, along with any restrictions or requirements they may wish to see met before they provide funds.

The process of identifying the risk is what an EWS1 form begins. The form is not intended to be a 'building safety' form, more a way to feed into the building safety documentation and reassure a Lender that the potential risks are known and quantified. You can view a 'Roadmap' to an EWS1 form using our flowchart in the document HERE



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