Ministerial Working Group on Mortgage Lending and Cladding meeting summary: 10 December 2020

Items and actions

Items 1 & 2: Open & Actions

• SG officials to consider legislative needs and options to address multi-owner and multiple EWS form requirements, including possible designation of responsible duty holder (Complete,  Item 3)
• Members  to discuss and provide discussion paper on insurance issues (Complete, Item 4)
• Governments across the UK to consider insurance industry implications and funding options for inspection and remediation with industry. (Complete)

All actions were completed; the Minister provided an update on his attendance at the UK roundtable meetings and developments, including discussions on advice notes and insurance issues.

Item 3:  Update: UK & devolved Administrations, RICS

The Group was updated on SG actions, including Ministerial participation in UK level-meetings, work on legislative options and wider developments.

Discussion noted the updated draft EWS1 process and RICS consultation, as well as live portal development for completed EWS1 assessments, which will further reduce concerns of fraud (Item 5) by registering and limiting upload access to qualified professionals.

Action: Working Group and members will contribute to RICS consultation in addition to previous involvement.

Action: Working Group will seek briefing from the Institution of Fire engineers (IFE) on the portal functions and development.

The meeting also noted that while RICS guidance reflects published MHCLG guidance RICS stand ready to adapt to cover published Scottish Advice Note (Item 6) as required.  RICS noted that the proof of guidance impact will ultimately come from lender response to both the consultation and their approach to implementation.  The Group welcomed the draft guidance as likely to reduce lender concerns and define the envelope of affected properties.  The Group will take further updates on developments in a further meeting in early 2021.

Chris Ashurst of High Rise (Scotland) Action Group shared an update on practical experience of obtaining an EWS1 form through factor mandating, offered to share further documentation and to meet officials to discuss further.  This welcome offer was agreed.

Action:  Officials will liaise and meet High Rise (Scotland) Action group prior to the next meeting of the Group.

Item 4:  Insurance markets

The Group considered reported experience of the Indemnity insurance market by surveyors.

While experience seems mixed, ABI noted that while there are sector-specific issues there is a wider market context of a hardening outlook in recent years affecting all sectors; with views expressed that RICS guidance should contribute to greater market confidence.

The Minister noted a pressing need to develop hard evidence of clear market inhibitors, allowing the Group and government to seek action to address these directly or in concert with others.

Action Points

Evidenced examples of multi-property EWS1 in Scotland (1) and insurance market experience (2) were offered with lender and factor colleagues offering to approach firms active in Scotland to share their experience.  Officials will pursue further evidence with Group members and arrange discussions with EWS1 providers prior to next meeting.

Item 5: Potential for fraud

Short discussion noted some unverified anecdotes but no evidenced examples of fraud in Scotland and the portal’s role in reducing potential further, although the Minister is pursuing evidence from Parliamentary colleagues.

The Minister noted the need for any reported fraudulent activity to be evidenced and factual, rather than anecdotal, to allow action and preventative measures to be taken.

All members agreed to share any evidence of fraud or attempts at fraud with officials immediately on receipt so appropriate preventative action can be taken immediately.

Item 6:  Scottish Advice Note

The consultation process and development of the Scottish Advice Note, including a welcome risk-based approach with the exception of hard exclusions for ACM-PE material known to be of significant hazard.

Members noted this process should continue to avoid unforeseen changes which might inhibit solutions.  The Minister confirmed the intent is exactly that, with a commitment to ongoing stakeholder engagement and an iterative process before publication.

Timescales for publications were considered, with priority given to precision rather than completion to deadline, albeit early publication remains expected.

Item 7:  Further meeting & actions                                     

A further meeting in late January/early February 2021 was agreed  in principle to allow updates on RICS guidance, the Scottish Advice Note  and evidence on EWS1 (Action 1) and insurance market (Action 2).

The Minister noted thanks to all and particularly John Baguley, in his final meeting, for help and contributions.

More Homes Division

December 2020