We are continuing our series of insights relating to key risks facing the Real Estate sector. Greg Spiteri, our Head of Sales and Marketing for the Real Estate Division, looks at composite panels and some of the issues facing investors, developers and managing agents around property portfolios.
The fire risk of façade elements: what should you consider?
Building combustibility has been a high-profile subject for the last 18 months, since the Grenfell tragedy. Common misconceptions and gaps in essential information are not helping leaseholders, freeholders and managing agents understand their role in ensuring their buildings’ fire safety.
The events of that incident at Grenfell have highlighted the extent of fire risks in high-rise buildings, though ACM (Aluminium Composite Material) cladding is just one of many high-risk concerns that residents, freeholders and managing agents should be aware of. The narrow focus on this type of cladding distracts from the size of the issue.
As consultants specialising in the area of façade combustibility, our technical partners FRC (Façade Remedial Consultants) often find a lack of information available to help people understand their buildings’ external fire risk or its compliance with legislation. There is also the challenge of knowing the remedial steps to take if the building is not fire resilient.
How do I know if my façade is flammable?
Meeting legislation is not the same as being risk free when it comes to fire, an area that the impending changes to Building Regulations will partly address.
The combustibility of cladding is rated on the Euro Class scale, where ‘Class B’ is now becoming restricted. Euro Class B rated materials, such as the ACM cladding which covered Grenfell, was previously described as having ‘limited’ combustibility.
More combustible Euro Class C-E materials, such as HPL (High Pressure Laminate) cladding, are extremely common especially on high-rise buildings throughout the UK and hold, in many cases, an even greater fire safety risk. Yet for the most part, have not been addressed as the main area of focus has been on ACM.
Other products often fly under the radar as they look visually different to cladding. Such an example is EPS (Expanded Polystyrene) Render, which is an extremely common material due to its high insulation rating and relatively inexpensive cost. However, Polystyrene is extremely flammable and even fire-retardant EPS render is still only rated at Euro Class E (Very Combustible). If a fire reaches the void between the internal wall and the EPS at the back of the render, it could spread across the entire section at enormous speed.
It is important to understand the risks associated with your cladding and what the different ratings of material actually mean. Thousands of UK residents are still at the mercy of combustible façade elements, often resulting in an inability to sell their properties.
Is it just about cladding?
The level of this risk depends on, and could be exacerbated by, a number of factors. For example, the type and combustibility of insulation used and the compartmentation of areas behind the cladding.
Large cavities behind the cladding and ineffective fire barriers can allow for trapped fire to spread quickly and increase the scale of the incident.
In buildings with effective fire barriers, the ‘stay-put’ fire evacuation method works as the fire is contained to the immediate area for a longer time to protect other areas while the fire service tackles the fire. If fire barriers are installed poorly or completely absent from the sub-structure behind the cladding fires cannot be contained and put both tenants and the fire service at greater risk.
In a recent document released by the Ministry for Housing, Communities and Local Government, advice was offered to the owners and managing agents of blocks of flats which have spandrel panels as part of their façade. Due to a lack of information regarding the panels on older buildings, whether they met regulations and the materials they are made of, there are concerns that these panels and the insulation behind them may contribute to the spread of a fire. Sample testing is being recommended for anyone that is unsure of where they stand.
Why have nearly 500 buildings been left unsafe?
The new Government legislation will not cover current buildings, only new builds. We are struggling to understand why the safety of existing residents has not been made of paramount importance.
Richard Jones, Head of Policy and Public Affairs at IOCH (Institution of Occupational Safety and Health) has called for improvement plans to be enforced for the many buildings known to have significant fire risk, buildings in which thousands of people live and work daily.
If we understand the risks, why are remedial works not being carried out? We are in regular contact with building managers and there is usually either a lack of knowledge or confusion regarding responsibility of carrying out these works.
How is this affecting the value of flats?
The lack of information surrounding façade elements and their safety is creating insecurity amongst surveyors being asked to value properties. Just recently, there have been reports of properties clad in materials that have passed the current regulations, being returned with a zero-valuation.
Suddenly leaseholders cannot sell their flats, freeholders are experiencing negative equity and insurance companies will not be able to cover the property. This then causes a knock on effect to mortgages that leaseholders may have taken out, whose policies require home insurance.
What isn’t covered in the new legislation?
The new legislation will be enforced for certain new buildings over 18 metres in height. Hotels and offices are exempt on the basis that they have a different evacuation strategy. Consider the number of staff and customers these buildings are used by.
We do not feel that safety should be compromised due to a building’s height. 5 storey blocks of flats are an example, these are likely to be just below 18 metres. Considering the speed at which the Grenfell fire spread, a fire could reach the top of the building in less than 4 minutes. The duration of most fire drills is between 5 and 15 minutes.
Equally, existing blocks of flats that are not covered in the new legislation, with Euro Class B cladding or below and insufficient fire barriers, face similar risks. Thousands of tenants presently live in these buildings, at the same level of risk.
What actions should Leaseholders, Freeholders and Managing Agents take?
For Freeholders and Managing Agents, it is crucial to understand the risks and act upon them. Lack of knowledge does not negate liability, nor does it save lives.
For leaseholders, the cost to replace the cladding could directly affect you. Residents are facing remedial costs of £40,000 per flat in some buildings where a complete recladding is required.
Not replacing combustible cladding may also invite additional difficulties relating to the aforementioned insurance and property sales. Interim measures, such as bringing in a fire marshal to carry out a ‘waking watch’, can also cost up to £43,000 per month.
Moving forward, there must be transparency in the costs of any remedial works and assurance that such work will be carried out to the correct and safe standard.
A high-rise multipurpose tower block housing a hotel on the lower floors and executive apartments on the floors above were having issues with falling Terracotta tiling, which had the potential to injure hotel customers or members of the public.
Upon survey, whilst the Terracotta tiles were found to be of a sufficient fire safety rating, the poor quality of workmanship, use of combustible insulation, large cavities behind the tiling and lack of fire barriers meant that there was considerable evidence that the system would not pass the required building regulations tests.
The planning of remedial works is under discussion.
A residential complex was surveyed and found to be clad almost entirely in Expanded Polystyrene Render.
Behind the render was a loosely fitting rail system and no fire barriers between floors, vertically, horizontally or around any windows. A fire starting at ground floor could potentially spread throughout the EPS and reach the top of the 4 storey areas in 5-10 minutes. A strip and re-clad along with the installation of fire barriers has been recommended and specification work is due to start soon.
It is essential to be not only aware of risk but seek professional guidance on the type of risks that can be placed with the specialist insurance market. Not only will this protect your property assets but your balance sheet too.
Find Out More
If you would like to talk to us at greater length about this or any other aspect of Real Estate please contact us on 0330 660 0401 or at Realestate@stackhouse.co.uk