Service Charges and Cladding/EWS1: The Unsellable Flats (2026)

This is the worst scenario that can befall a buyer: you buy a London flat, you want to sell a few years later — and you cannot find a buyer. Because there is a problem with your building's external walls, and no bank will lend on a flat in that block. And through all of it, your service charge bills have exploded. This guide explains this post-Grenfell risk, the EWS1 form, and what you must check before you make an offer.

What the EWS1 Is — and What It Is Not

First, let us correct a common misconception. The EWS1 (External Wall System) form is not a legal requirement or a fire safety certificate. After the Grenfell disaster, lenders became reluctant to lend on buildings with cladding; the market effectively froze. In 2019, RICS and UK Finance created a standardised tool so lenders could assess external wall risk: the EWS1.

So the EWS1 is a lender-driven document. No law says "this building must have an EWS1". But in practice, if a lender wants one and the building cannot produce it, flats in that block cannot be mortgaged — and a flat that cannot be mortgaged effectively cannot be sold.

The Ratings: Which Letter Saves You?

The EWS1's outcome determines your flat's fate:

B2 is the nightmare scenario. This rating means remediation must be carried out before the external wall system can be assessed as low risk. Most lenders will not lend on any flat in that block until the remediation is complete and a new EWS1 is obtained. This affects the saleability and mortgageability of every flat — even if there is nothing wrong with yours.

An important nuance: a B2 rating does not mean the building is unsafe to occupy, and it does not require evacuation. Building safety is governed by a separate regime (the fire risk assessment and the Fire Safety Order). B2 is a *mortgage* issue.

When Is an EWS1 Required?

The rules have narrowed over time. The general position as of 2026:

Also, from 1 November 2026, the second edition of RICS's cladding valuation standard applies; it brings clearer, storey-based criteria for when a valuer should request an EWS1, and in some cases allows a FRAEW (PAS 9980) summary to be used instead.

Why Do Service Charges Explode?

A cladding problem hits not only your sale but your pocket. In an affected block, service charge bills usually rise immediately — even before any remediation work has begun. The main causes:

The "waking watch": freeholders and managing agents may feel obliged to put a security team on 24/7 patrol in the building until the fire risk is resolved. This is an extremely expensive item and feeds straight into the service charge.

Insurance premiums: buildings insurance premiums on buildings with cladding issues rise dramatically.

The EWS1 assessment itself: an EWS1 assessment typically costs £6,000–£20,000 (depending on the building's complexity) and is usually recovered from leaseholders through the service charge.

Who Pays? (The Building Safety Act Protections)

Here is vital news for buyers. Under the Building Safety Act 2022, flat owners who count as "qualifying leaseholders" cannot be charged for cladding remediation works. This protection is evidenced by a Leaseholder Deed of Certificate.

So if a building needs cladding remediation, as a qualifying leaseholder *you* may not have to pay the tens of thousands of pounds of remediation costs. But note: this protection covers the cost of the remediation *works*; items like the EWS1 assessment cost, the waking watch and increased insurance can still reach you through the service charge. The scope of the protection also depends on circumstances — have it confirmed by a solicitor.

The Good News and the Bad News

The good news: the market has opened up markedly since 2023. From January 2023, with the RICS guidance and UK Finance's industry statement, lenders became able to consider mortgage applications on flats in buildings of 11 metres and over — where there is evidence of one of the following: (a) a commitment that the building will be self-remediated by the developer, (b) that the building is covered by a recognised government scheme (Developer Remediation Contracts, the Cladding Safety Scheme or the Building Safety Fund), or (c) that the leaseholder is protected under the Building Safety Act (evidenced by a Deed of Certificate). So a missing or unfavourable EWS1 is no longer an automatic dead end — but assembling the right paperwork is vital.

Also, in April 2025, major lenders (including Barclays, HSBC, Lloyds, Nationwide, NatWest and Santander) pledged not to require wholesale reviews of EWS1 forms more than five years old — which prevented a fresh blockage caused by the nominal five-year life originally given to the forms.

The bad news: the problem is not over. On industry estimates, hundreds of thousands of flats remain affected in some way. According to official data, an estimated 7.5% to 9.9% of residential buildings between 11 and 18 metres in England require remediation, partial remediation or mitigation for cladding-related fire risk — which means 2,900 to 5,800 mid-rise buildings. The government's Remediation Acceleration Plan targets are long, too: in funded schemes, buildings over 18 metres are to be remediated by the end of 2029, and 11–18 metre buildings by the end of 2031.

And a cautionary tale: it emerged that a fire safety engineer had signed thousands of EWS1 forms across hundreds of buildings without being properly qualified to do so; those forms were invalidated, and the owners of flats in the affected buildings were back to square one. (Lenders later pledged not to require wholesale reviews of those forms either.) The lesson is clear: in this area, do not accept any document without question.

The Buyer's Checklist (Before You Make an Offer)

This is the most valuable part of this guide. If you are buying a flat and the building is over 11 metres, or has any form of external cladding, balconies or rendered insulation:

Running this checklist before you make an offer can protect you from both an unsellable asset and an exploding service charge bill.

Optivest Note: This sits at the exact intersection of Optivest's real service areas, and let us say it honestly: for a buyer living abroad this risk is even greater, because you cannot see the building yourself, talk to the neighbours or examine the documents. That is precisely the job of our legal support (conveyancing) service: requesting and examining the building's EWS1 status, the fire risk assessment, the Leaseholder Deed of Certificate and the service charge history. Our mortgage brokerage service is the critical second leg: what each lender accepts on cladding-affected buildings varies enormously, and applying without a broker experienced in this area can end in an unnecessary decline. Let us say it plainly: if a building is over 11 metres and has cladding, never make an offer without running these checks — and that applies to the projects we offer too.

Important notice — not legal/financial advice: This article is for general information only. Building safety legislation, lender criteria and RICS guidance are actively changing (a new RICS standard applies from November 2026, for example). A building's position, and whether the Building Safety Act protections apply to you, are specific to the person and the building; they must be examined by an SRA-registered solicitor. Mortgage acceptance varies by lender. Check gov.uk for the current position. Optivest does not give legal advice and is not a licensed financial adviser.

Frequently Asked Questions

Is the EWS1 form legally required?

No. The EWS1 is not a legal requirement or a fire safety certificate; it is a lender-driven tool created by RICS and UK Finance in 2019. But in practice, if a lender wants one and the building cannot provide it, flats in that block cannot be mortgaged and effectively become unsellable.

What does a B2 rating mean?

B2 means combustible material is present in the external wall and remediation is required. Most lenders will not lend on any flat in that block until the remediation is complete and a new EWS1 is obtained. This affects every flat in the block. But B2 does not mean the building is unsafe to occupy.

Will I have to pay for the cladding remediation?

Under the Building Safety Act 2022, if you count as a "qualifying leaseholder", you cannot be charged for cladding remediation works; this protection is evidenced by a Leaseholder Deed of Certificate. But items like the EWS1 assessment cost, the waking watch and increased insurance can still reach you through the service charge. Confirm the scope with your solicitor.

Why do service charges rise suddenly?

In blocks with cladding issues, bills rise even before any remediation begins: a 24/7 "waking watch" (fire patrol) is extremely expensive, buildings insurance premiums rise dramatically, and the EWS1 assessment itself (typically £6,000–£20,000) is usually recovered through the service charge.

Can I get a mortgage on a building with cladding?

Probably yes — the position has improved since 2023. Lenders can consider an application if the building is covered by a recognised remediation scheme, if the developer has pledged to self-remediate, or if Building Safety Act leaseholder protection applies (evidenced by a Deed of Certificate). But criteria vary greatly by lender; work with a mortgage broker experienced in this area.

In Summary, and How to Reach Us

Cladding and service charges are the two risks most likely to burn you on a London flat. A B2-rated EWS1 can make every flat in a block effectively unsellable; a waking watch and insurance rises can explode your service charge bill. The good news is that since 2023 lenders can lend where there is a remediation scheme or Building Safety Act protection — but that depends on the paperwork being properly assembled.

So the rule is simple: if the building is over 11 metres or has cladding, have the EWS1 status, the remediation scheme, the Deed of Certificate and the service charge history checked before you make an offer. Optivest's legal support service requests and examines these documents; our mortgage brokerage service finds the right lender for cladding-affected buildings. Contact us or reach us on WhatsApp. See our legal support service, our mortgage brokerage service, and our leasehold guide for ownership structures.