Valuing Multi-Storey, Multi-Occupancy Residential Buildings with Cladding
- 4 days ago
- 8 min read
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What is this blog about?
In this week’s blog, we look at the RICS Professional Standard - Secured Lending Valuation of Properties in Multi-Storey, Multi-Occupancy Residential Buildings with Cladding (2nd Edition).
This is effective from 1 November 2026, although early adoption is encouraged by RICS. Our blog on the 1st Edition from 2021 is available on our website.
This is essential reading for all Residential Registered Valuers and RICS APC and AssocRICS candidates involved with residential valuations.
What is the purpose of the guidance?
The guidance relates to valuations of residential blocks of flats for secured lending purposes.
The guidance DOES NOT relate to individual houses (terraced, semi-detached or detached), bungalows or non-domestic developments. It does, however, include mixed use blocks of flats.
As a Professional Standard, it is of mandatory application where the word ‘must’ is used. However, lender guidance will always take precedence in a valuation instruction.
Specifically, it helps valuers to decide when to request an EWS1 form. The updated guidance includes proportionate criteria to apply when valuing residential blocks of 4 storeys or less.
When is an EWS1 form usually required?
An EWS1 form is usually required where a building has visible cladding. The RICS guidance helps valuers to identify where fire safety remediation work may materially affect value, without an EWS1 form being requested for every building, i.e., the concept of proportionality.
This is defined by the UK Government Building Safety Programme guidance as being; aluminium composite material (ACM), brick slips, high pressure laminate (HPL), metal composite material (MCM), metal sheet panels, rendered external wall insulation system, plastic, tiling systems and timber.
For the purposes of the subject RICS guidance, the following types of cladding are excluded; solid brickwork, blockwork or stonework, traditional cavity walls, timber framed buildings, concrete panels and stone panels.
Why has a 2nd Edition been published?
The 2nd Edition has been published to align with the latest building safety legislation and industry best practice. This is primarily discussed in section 2 - Current UK Government Guidance.
Key legislation and industry guidance to be aware of includes:
Fire Safety Act 2021
PAS 9980 methodology - fire risk appraisal of external walls (FRAEW) - a FRAEW is different to a EWS1. The former is a certificate of life safety for the building, whilst the latter is a document used solely for valuation purposes by valuers and their lender clients.
Building Safety Act 2022
Levelling-Up and Regeneration Act 2023
Leasehold and Freehold Reform Act 2024
Remediation Acceleration Plan
It should be noted that an EWS1 form is not a building safety certificate and does not confirm that a building may still require future remediation work.
How does the Professional Standard link to the Red Book?
The RICS Valuation - Global Standards (Red Book, 2025) and UK National Supplement are the starting point for any valuation. In brief, these require valuers to apply professionalism scepticism, to ensure that any assumptions are reasonable and relevant and to identify any factors that may materially affect value.
VPGA 2 of the Red Book relates specifically to secured lending valuers. Valuers are directed to assume that no deleterious or hazardous materials have been used in the construction of the building.
However, the presence on inspection of cladding or balconies on a block of flats is clearly a hazard which could materially affect value and saleability of the property.
Where this is the case, the valuer may need to collate additional information before reporting on value, such as specialist input (in an EWS1 form) on the cladding type and likelihood of remedial work being required. EWS1 forms are used for valuation purposes only and are not a form of fire risk assessment.
So when should a valuer request or not request an EWS1 form?
The valuer should always document their rationale for requesting an EWS1 form. This should include site notes and photographs.
RICS also state that the:
‘Valuation report should also state that there may be costs of remediation at some point in the future dependent upon a full fire risk assessment of the building, which includes a fire risk appraisal and assessment of the external wall construction. For the purposes of the valuation, these costs are not assumed to significantly affect the value’.
This is because requests for EWS1 forms in inappropriate circumstances, e.g., low risk building or no visible cladding, can lead to significant delays in the purchase & sale process and the misuse of limited fire safety expert resources.
RICS recognise that valuers are not fire safety experts and are not expected to assess the chemical composition of cladding through non-intrusive inspections.
EWS1 forms should not be requested where the valuer can establish (within their scope of competence) that:
‘The building owner has met the requirements of the Fire Safety Act 2021 for an assessment of the external walls and attachments that raises no concerns that remediation is required, or;
A building over 18m has a valid building control certificate in accordance with The Building (Amendment) Regulations 2018’.
Where there is a route to remediation, this should be accounted for within the valuation.
Valuers should follow their lender client’s guidance, which may include assumptions regarding EWS1 forms.
Where the lender has not issued guidance, the criteria in the Professional Standard should be applied and an EWS1 form requested.
The RICS confirm that the decision to request an EWS1 form should be based on how many storeys the building has and the cladding materials present:
Buildings over 6 storeys - required if there is any cladding/curtain wall glazing, or if there are vertically stacked balconies with combustible decking or balustrades.
Buildings of 5 or 6 storeys - required if there is a ‘significant amount’ of cladding, or vertically stacked balconies with combustible materials.
Buildings of 4 storeys or fewer - only required if there is a ‘significant amount’ of high-risk materials, being ACM, MCM or HPL.
An EWS1 is not required where a building is 6 storeys or less and ‘would meet the criteria set out above only because of cladding solely located on the top storey and set back from the main facades on all sides’.
A storey is defined as any floor above ground level. The RICS definition is consistent with the wording of Building Regulations Approved Document B.
A ‘significant amount’ is defined as being approximately 25% of the entire facade or one elevation that links multiple floors or the main escape route.
The valuer must check that the EWS1 is fully completed, signed and that the signatory’s professional body and qualifications are listed. The valuer is not expected to peer review the technical findings, they are only expected to ensure that the form is valid and relates to the correct building.
If an FRAEW is provided to the valuer, including an executive summary / summary report - then it is reasonable for the valuer to rely on the FRAEW instead of an EWS1 form. The valuer should not review or comment on the remainder of the FRAEW as RICS do not deem Members sufficiently competent to do so.
If the FRAEW states a medium or high risk rating, then the valuer should consider how the cost of remediation and the timeline of works could materially affect Market Value, especially if the leaseholder is not ‘qualifying’ under the Building Safety Act 2022.
How can valuers manage risk and liability in this type of work?
RICS provide suggested wording that valuers can include in valuation reports, depending on whether an EWS1 form is requested or not. This is stated on pages 15 and 16 of the guidance.
In summary:
If an EWS1 is NOT requested - the valuer must state that the decision is not a guarantee that works will not be required in the future.
If an EWS1 IS requested - the valuer must include a disclaimer stating they have relied on the third-party EWS1 in good faith and have no liability for losses arising solely from inaccuracies in that form.
We recommend that valuers read and apply the guidance in Section 4 of the Professional Standard in full.
How can I apply the guidance in practice?
Here is a brief checklist to work through if you are involved in the valuation of flats falling under the RICS Professional Standard:
[ ] Height: How many storeys does the building have?
[ ] Material: Is there any relevant cladding (e.g., ACM, HPL, timber)?
[ ] Quantity: Is it a ‘significant amount’ (approx. 25%) of cladding?
[ ] Lender instructions: Have you checked if the specific lender's guidance overrides the RICS Professional Standard?
[ ] Documentation: Have you applied the RICS suggested wording and liability disclaimers, as set out in the Professional Standard?
What do I need to know as an RICS APC candidate?
The new Professional Standard is relevant to a variety of core and optional technical competencies across the Valuation, Residential, and Commercial Real Estate pathways.
Valuation:
Compliance - you must demonstrate how you apply the Professional Standard when valuing high-rise residential blocks of flats for secured lending.
Inspection - you must be able to identify obvious potential hazards, such as cladding or stacked combustible balconies, during a non-intrusive inspection.
Reporting and assumptions - you must understand when it is reasonable to make an assumption that no deleterious materials are present and when you should depart from this assumption and request specialist input.
Criteria for EWS1 forms - you must be able to apply the RICS decision tree when deciding to request an EWS1 form based on building height and the ‘significant amount’ (25%) threshold of cladding.
Liability disclaimers - you should know the RICS-recommended wording for valuation reports to protect you and you firm when relying on third-party EWS1 forms.
Professional scepticism - you must apply the Red Book requirement to be sceptical of any information relied upon and ensure that any EWS1 form provided is complete and signed by a qualified professional.
Inspection:
The Professional Standard defines the physical factors you must look for at the property.
Identification - knowing the difference between masonry (exempt) and cladding types, such as ACM, MCM or HPL, that require closer scrutiny.
Site notes - you must maintain robust records, risk assessment criteria and photographs specifically justifying the decision to (or not to) request an EWS1 form.
Legal/Regulatory Compliance:
You must understand the intersection of valuation and building safety legislation.
Fire Safety Act 2021 - you must understand that the external wall system is now legally part of the fire risk assessment.
Building Safety Act 2022 - you must understand leaseholder protections and how they might mitigate the impact of remediation costs on the Market Value of a specific flat.
Ethics, Rules of Conduct and Professionalism:
Competence - you must recognise the limits of your expertise. You are a valuer, not a fire engineer (unless you have undertaken additional specialist qualifications and education!). You must not perform a life safety assessment or comment on the internal components of a cladding system, beyond your visual inspection.
Duty of care - you should provide clear and transparent advice to your lender client regarding the potential for future remediation costs.
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N.b. Nothing in this article constitutes legal, professional or financial advice.