Ministerial Working Group on Mortgage Lending and Cladding meeting summary: January 2021

Item 1: Open, Apologies & Actions

No apologies were noted with all members attending.  The Minister noted the absence of a replacement representative from RICS but thanked Mr Fergusson for representing their interests for Item 2.

• Action: Working Group and members will contribute to RICS consultation in addition to previous involvement.
• Action: Working Group will seek briefing from the Fire Industry Association (FIA) on the portal functions and development.
• Action:  Officials will liaise and meet High Rise (Scotland) Action group prior to the next meeting of the Group.
• Action: 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.

All actions were completed and included for discussion in relevant agenda items.

Item 2:  Updates on draft guidance and consultations

The Group was updated on progress with the RICS guidance, with the intended approach expected to remove lower and some mid-rise properties from the EWS1 process subject to proportion limits on (non-flammable) cladding and balcony construction.  Scotland’s interests, tenure approach and legal system have been communicated.  The Group will continue to check these are recognised appropriately.

Discussion noted generally supportive responses from significant sectors, with discussion making clear related issues like Professional indemnity insurance liability and the need for a single building survey in Scotland will remain outstanding issues.  The Group welcomed the progress made, noting that success will require formal agreement of several sectors who largely welcome the approach in principle.

Further updates on the parallel Scottish Advice Note process were also discussed with the Minister emphasising his intention that where agreement was reached on RICS guidance and other areas, the intent is to ensure alignment between that and the Scottish Advice Note (SAN) as much as possible.  The aim is that the SAN advances the clear need for a focus on life and building safety which in turn will support lending solutions in line with RICS guidance rather than creating further roadblocks to progress as had been seen elsewhere.  The overriding priority for Government must be the safety of people.

Members of the Group and professional bodies with an interest, including Scottish Fire & Rescue Service, the Institute of Fire Engineers and others will be further consulted as technical elements of the guidance are finalised in the coming weeks to support this outcome.

Action: SG Officials to develop communication strategy setting out the timeline and common approach and involve interested members.

Action: SG officials to prioritise discussions with key stakeholders and members of the Group to contribute to the SAN process.

Item 3:  Legislative options

Members of the Group were invited to note the legislative options explored following a full review by policy and SGLD officials.  While it is clear there are no available options to exercise powers for EWS1 purposes, limited existing options available through secondary legislative vehicles might provide alternative means of progress.  Longer term options were also noted.  The Group considered these options and also Group considered reported experience of the Indemnity insurance market by surveyors.

Views were mixed about the merits of the identified options, with pragmatic views on enabling swifter action and addressing historic calls for safety assessments. 

Action: SG officials to develop options further and undertake discussions with Group members to do so. 

Items 4 & 5: Meetings with EWS1 providers and Qualification requirements

Officials provided an update on discussions facilitated by UK Finance colleagues which aimed to hear at first hand the experiences and challenges faced by EWS1 providers in meeting demand and fast-growing and developing market requirements. 

The barriers to provision of single building surveys, the impact of advice issued by professional bodies limiting qualified providers and insurance market pressures were particularly noted as common issues.

Changes to professional qualifications requirements in particular raised the issue about the validity of now historic EWS1 assessment.  The Minister and others noted the need to explore this further with providers to ensure clarity.

Action:          Officials to approach lenders and professional bodies on this point.

Action:          Officials to engage IFE to take their views.

Addressing this and single building approaches will help avoid inconsistency which affects market confidence for professionals and clients/the public.

Item 6:  Remediation update

The group noted public and Public Accounts Committee comment on the efficacy of the “first come first served” approach of the Building Safety Fund in England.

While noting the early availability, the group agreed the need to prioritise on need and risk in Scotland, especially as overall levels of funding are unlikely to be able to meet all demand.

Agreed priorities for identification, as called for by appointed Sub-Groups in meeting 2 were noted.  While forthcoming elections were noted, the Minister made clear the provision of a clear pathway for progress would be in place to allow any electoral outcome to pick up this work swiftly to ensure progress.

The Group also noted increased media interest in this issue and agreed to provide comment as approached.

Action:  SG officials to circulate latest SG communications for distribution to interested parties and Group member organisations.

Item 7:  AOCB and close                                                     

No further business was raised with a further meeting to be agreed through correspondence.