Plans aim to facilitate surveyors assessing residential buildings
The government has announced a new professional indemnity insurance scheme for property surveyors assessing cladding.
The aim is for the scheme to streamline the process for leaseholders aiming to buy and sell flats by avoiding the difficulties created by the EWS1 (external wall system) assessments.
The scheme has been set up in response to the shortage of insurance companies who are providing PII to firms undertaking such assessments in mid- and high-rise residential buildings.
The Department for Levelling UP, Housing and Communities (DLUHC) announced in July its support for the scheme, and now with backing from insurers, such as MGAM, SCOR, and Aon, the plans have gone ahead.
The plans are for the scheme to run for five years before insurers take up the coverage, removing the need for government intervention.
Paul Scully, the DLUHC Minister, said:
“For far too long leaseholders in high rise buildings have been stuck in limbo, unable to secure mortgages on their properties, sell up and move on to their next step.
It is for these leaseholders that we have launched this new indemnity scheme today, and I thank our partners for helping make this a reality. This scheme will give EWS1 assessors the confidence to exercise their professional judgement, speed up the sale of flats and allow lenders to lend with confidence.”
The Government Actuary’s Department (GAD) has estimated expected losses at around £100 million.
Stuart Andrew MP, who was the previous Housing Minister, stated:
“The cost of the scheme, including the expected losses, will be offset in full through premiums: EWS1 assessors will be required to purchase PII policies for any EWS1 assessments they complete, with the funds gathered being accumulated and subsequently used to pay out any insurance claims successfully made against the assessors. In this way, the scheme will operate as fiscally neutral for Government.”
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