Cladding, EWS1 and Fire Safety for Flat Landlords

If you own a leasehold flat in a cladding-affected block, your BTL is tied to building safety law, lender policy and your freeholder's competence. You cannot just "wait it out" without understanding the moving parts.

1. EWS1: what it is and when it bites

The EWS1 (External Wall System) form is a standardised survey for lenders and valuers, not a legal certificate. It records a fire-risk assessment of the building's external wall system and gives it a rating (A1-A3 or B1-B2).

Key points for you:

• One EWS1 usually covers the whole building, not individual flats, and in England and Wales is typically valid for 5 years.
• It is not legally required by government, but many lenders still insist on EWS1 or equivalent where there is cladding or balconies with combustible materials.

RICS guidance says EWS1 is typically needed for:

• Buildings 7+ storeys with cladding or balconies.
• 5-6 storey buildings with "significant" cladding.
• Lower-rise buildings with certain high-risk panels (ACM, MCM, HPL).

Government data for Jan-Mar 2024:

• About 46% of mortgage valuations for flats in buildings 7 storeys+ needed an EWS1 or equivalent.
• 23% of valuations in 5-6 storey blocks needed one.
• Only 2% of valuations in 1-4 storey buildings needed one.

Who pays:

• The building owner / freeholder commissions the EWS1.
• In the early years, costs were often pushed into service charges to leaseholders.
• Since the Building Safety Act leaseholder protections kicked in, charging qualifying leaseholders for cladding-related assessments/remediation is heavily restricted in many cases.

If your managing agent is asking you to fund an EWS1 or top-up surveys, you need to check that against the Building Safety Act rules before you pay.

2. Which buildings are affected and how

The highest risk (and therefore most lender-sensitive) buildings are:

• Residential blocks over 11 metres or more than 5 storeys, particularly with cladding systems or combustible balconies.

But in practice:

• Any block with modern cladding, balcony decking, or unknown external wall materials can trigger an EWS1 request, even under 11m, depending on lender policy.

Government and NAO reporting suggests total remediation costs for dangerous cladding on 11m+ residential buildings in England are estimated at GBP 16.6 billion, with around GBP 9.1 billion expected from government funds and the rest from developers and building owners.

Investor translation: if your block has any "non-traditional" external wall build-up, assume it will come under scrutiny for finance and insurance.

3. Building Safety Act 2022: protections and new duties

The Building Safety Act 2022 (BSA) created two big buckets of change:

• Leaseholder protections on who pays for historical building safety defects.
• A new building safety regime for higher-risk buildings (HRBs) with accountable persons and building safety charges.

Leaseholder protections (England, 11m+ or 5+ storeys)

Key points as updated to July 2024 guidance:

• Protections for "qualifying leaseholders" in buildings over 11 metres or 5 storeys with historical safety defects came into force on 28 June 2022.
• Qualifying leaseholders cannot be charged via service charge for remediation of unsafe cladding at all.
• For non-cladding historical defects (for example missing fire-stopping), qualifying leaseholders' contributions are capped and in many cases zero if the building owner is or was linked to the original developer, or the landlord meets a "wealth" test.
• The government expects developers to fund remediation of buildings they built; where the developer cannot be traced, funds like the Medium-Rise Scheme (11-18m) and the Building Safety Fund (18m+) fill some gaps.

Higher-risk buildings and building safety charges

For higher-risk buildings (generally 18m+ or 7+ storeys with at least 2 residential units):

• There must be an accountable person and usually a principal accountable person responsible for building safety.
• Leaseholders can be charged a building safety charge for ongoing safety measures, but not for costs the Act bans from being passed on (for example cladding remediation for qualifying leaseholders).

You as a BTL leaseholder:

• Gain protection against big "grenade" cladding bills in many cases.
• Still see higher day-to-day safety costs via building safety charges and management overhead.

4. Mortgage and remortgage: why EWS1 dictates your options

Lenders have tightened, but are slowly normalising:

Government lender data (Jan-Mar 2024):

• 46% of valuations for flats in 7+ storey blocks needed an EWS1 or equivalent.
• 23% for 5-6 storeys.
• 2% for 1-4 storeys.

Practical consequences:

• If your block needs an EWS1 and there is none, many lenders will not offer a mortgage or remortgage.
• If the EWS1 shows a B2 rating (combustible materials needing remediation) with no funded plan, a lot of lenders will walk away or down-value aggressively.
• Some lenders now accept alternative evidence (for example a Fire Risk Appraisal of External Walls, FRAEW), but that is still effectively the same process.

For you:

• When your fixed rate ends, your lender might move you to SVR if no EWS1 is available and remortgaging away is impossible.
• That can blow your Section 24-hit BTL numbers, especially with 2025-26 interest rates remaining above the old 1-2% era.
• If you are buying in such a block, you must assume a longer hold and limited remortgage options until remediation is done and the rating improves.

5. Insurance: why premiums exploded

Flat blocks with cladding and other fire safety issues have seen:

• Building insurance premiums up 300-400% in some cases since Grenfell, as reported by leaseholder groups and managing agents.
• Higher deductibles and more onerous conditions (waking watch, enhanced detection) while remediation is pending.

This flows through to you as:

• Higher service charges driven by block insurance, even where cladding remediation itself is covered by funds or developers.
• Potential lender concerns if the building has only limited cover or short-term insurance while defects are unresolved.

The Building Safety Act and government pressure have pushed insurers and freeholders to improve transparency; some leaseholder protections extend to limiting recoverable building safety costs. But there is no guarantee of "normal" premiums until buildings are fully remediated.

6. Selling a flat in an affected building

You cannot pretend the cladding problem does not exist.

You must disclose:

• The presence of cladding or known fire safety defects.
• Any EWS1 / FRAEW reports and ratings.
• Any remediation plans, Section 20 notices, building safety charges and whether works are funded by developers/government funds.

What this does to a sale:

• Without a clear EWS1 / FRAEW and funded remediation, a big slice of buyers will be cash-only, which usually means a lower price.
• Even with protections, buyers worry about resale, ongoing disruption and stigma.

Your options if selling:

• Sell now at a discount to a cash buyer who prices in risk.
• Hold until remediation is complete and an improved EWS1/BSA compliance position unlocks normal lending again.
• Try to negotiate with your lender for product transfers or internal remortgages even while EWS1 is pending, to avoid SVR shocks.

The right answer depends on stage of remediation, size of your mortgage, and local demand for cash purchases.

7. Remediation timelines, funds and who pays in practice

Big picture numbers:

• Public spending watchdog reporting in 2025 put the estimated cost of fixing dangerous cladding on 11m+ residential buildings in England at about GBP 16.6 billion, with GBP 9.1 billion expected from DLUHC funds and the rest from developers and owners.
• Government has committed at least GBP 5.2 billion of taxpayer funding across various cladding remediation schemes.

Key schemes and contributions:

• Building Safety Fund for high-rise buildings (over roughly 18m/17.7m), covering removal/replacement of unsafe cladding where no other party is paying.
• Medium-Rise Scheme for 11-18m buildings, funded where original developers cannot be traced or will not pay.
• Developer pledges and legal arrangements require major housebuilders to remediate buildings they developed, often at their own cost.

For an individual block, you may be in one of three positions:

• Developer-funded remediation agreed and underway.
• Government-funded through BSF or Medium-Rise Scheme.
• No clear funding route; building owner pursuing developers or arguing with government on eligibility.

Timelines:

• Remediation projects commonly run 2-5 years from identification to completion, depending on the scale of works, contractor capacity and disputes.

While you wait:

• Expect restricted lending, elevated insurance, possible waking watch or interim safety measures, and significant disruption for tenants and short-term voids during works.

8. Developer contributions and leaseholder cost caps (2024/25 position)

By early 2024, the legal position had tightened further:

• Schedule 8 of the Building Safety Act excludes qualifying leaseholders from paying service charges for cladding remediation and some associated costs.
• Later clarifications and secondary legislation (updated July 2024 guidance) confirmed landlords and developers must exhaust recoveries from those responsible (developers, cladding manufacturers) before looking to leaseholders.
• Non-qualifying leaseholders (for example investors with multiple properties above the value threshold) may still face some exposure, but caps and rules are complex.

For BTL landlords:

• If you are a qualifying leaseholder (broadly, under certain value thresholds and holding no more than 3 properties at time of key dates, with other tests), your exposure to historical cladding costs is heavily limited by law.
• You can still be charged for non-cladding building safety works up to capped amounts, and you still carry the indirect cost of higher service charges and disruption.

This is an area where you should get your own solicitor/accountant to confirm whether you meet the "qualifying leaseholder" tests on each affected flat.

9. When to hold vs when to cut your losses

This is commercial judgment, not one-size-fits-all, but you can at least frame it with numbers.

Hold looks better when:

• There is an agreed developer or government-funded remediation with a clear programme and expected completion date in the next 2-3 years.
• The EWS1 is B2 but linked to a funded plan, or already improved to A/B1 after partial works.
• You have a good long-term fixed or product transfer in place and can ride out the limited lending until remediation is complete.

Sell / de-risk looks better when:

• There is no EWS1, no funded plan and freeholder communication is minimal.
• Insurance and service charges have jumped so far that net yield is marginal even ignoring capital.
• Your loan-to-value is high, interest cover is tight, and you are exposed to remortgage or SVR risk in the next 1-3 years.

You should:

• Model net cashflow for the next 5 years on a "hold until remediated" assumption, including current service charges and likely increases.
• Compare that to a realistic cash-sale price now (probably a discount) that you could recycle into a more boring, mortgageable unit.

If the building is early in the process with no plan and your numbers barely wash their face even at today's costs, holding on "for the principle" is usually a bad business choice.

Legislation tracker, budget coverage, new tools. Free, no spam.

Didn't find what you were looking for?