The aftermath of the Grenfell Tower fire in 2017 triggered one of the most significant reforms to building safety legislation in the UK’s history. The Building Safety Act 2022, the creation of the Building Safety Regulator, and the ongoing remediation programme for buildings with unsafe cladding and fire safety defects have fundamentally altered the risk and liability landscape for leasehold property investors — particularly those acquiring flats in multi-storey residential buildings.

In 2026, building safety is not a peripheral concern for leasehold investors. It is a central due diligence issue that directly affects mortgageability, service charges, insurance costs and ultimate exit value. This guide explains the current framework and what investors need to check before committing to any leasehold flat acquisition.

The Building Safety Act 2022: Key Changes for Leaseholders

The Building Safety Act 2022 introduced a range of protections for leaseholders in buildings with historical fire safety defects. The most significant for investors are:

  • Leaseholder protections — qualifying leaseholders (those who owned their flat at 14 February 2022 or who have since purchased from a qualifying leaseholder by assignment) receive significant protections against being charged for the cost of remediating certain historical safety defects. These protections are not automatic but depend on meeting specified criteria.
  • Developer and landlord liability — the Act introduced new pathways to make developers and building owners responsible for the cost of remediation, reducing the risk of costs being passed on to leaseholders.
  • Building Safety Fund and Cladding Safety Scheme — government-funded remediation programmes cover the cost of removing unsafe cladding from buildings that meet the eligibility criteria (currently buildings over 11 metres and primarily the most dangerous ACM cladding cases).

Investors should note that the protections under the Act are personal to qualifying leaseholders and may not automatically transfer to a new buyer. The position depends on the specific facts of each case and should be confirmed with the buyer’s solicitor before exchange.

EWS1 Forms and Lender Requirements

An EWS1 (External Wall System) form is a certificate produced by a qualified professional confirming their assessment of the external wall construction and fire risk of a building. It was introduced by RICS and UK Finance in response to the cladding crisis and is used by mortgage lenders to assess whether a building is safe to lend against.

An EWS1 form rated A1 or A2 indicates no material risk from the external wall system. A rating of B1 or B2 indicates that remediation may be required, with B2 being the more adverse rating. Many lenders will not lend on flats in buildings with a B2 EWS1 rating, and some will not lend where there is no EWS1 form available for a building that requires one.

Investors should confirm from the legal pack or managing agent whether:

  • An EWS1 form exists for the building.
  • What rating the form records.
  • Whether the form is current and has not been superseded by new assessment or remediation works.
  • Whether the building is within the scope of the EWS1 requirement — not all buildings require one.

The absence of an EWS1 form for a building that requires one is a significant mortgage and resale risk. Buyers relying on finance will need to confirm their lender’s position before committing to exchange.

Service Charges and Building Safety Costs

Even where leaseholder protections under the Building Safety Act apply, investors should be aware that not all fire safety costs are covered by the protections. Works that fall outside the protected categories — for example, certain compartmentation works, fire door replacement programmes or ongoing fire risk assessment costs — may legitimately be charged through the service charge.

Service charge accounts for buildings with known cladding or fire safety issues may therefore reflect higher than average ongoing costs even where the principal remediation work is being funded elsewhere. For investors acquiring leasehold property in affected buildings, reviewing several years of service charge accounts and any section 20 notices is particularly important.

Medium-Rise Buildings: A Developing Area

Much of the initial focus of the post-Grenfell regulatory response was on high-rise residential buildings (over 18 metres). The Building Safety Act has since extended the regulatory framework to medium-rise buildings (11 to 18 metres), and the Cladding Safety Scheme provides government funding for remediation works in medium-rise buildings with certain types of unsafe cladding.

For investors acquiring flats in medium-rise buildings — a common profile for purpose-built residential blocks in urban areas — it is important to check:

  • Whether the building has been assessed for external wall safety.
  • Whether any remediation works are planned, in progress or completed.
  • Whether the building is registered with the relevant remediation scheme and what progress has been made.
  • The current service charge and insurance position, which may reflect elevated costs during the remediation period.

Impact on Finance and Exit

Building safety issues are among the most significant lender sensitivities in the current residential investment market. Lenders assess building safety at both the acquisition stage and on remortgage, meaning that a building whose status changes — for example, a new EWS1 assessment revealing greater risk than previously indicated — can affect not only the new buyer’s ability to finance but also the ability of an existing investor to refinance.

Investors with a buy-to-refinance or flip strategy should map the EWS1 position against their anticipated lenders’ criteria before acquiring. A property that is easily financeable today may face a more constrained mortgage market at the point of refinance if the building safety position deteriorates or if lender criteria tighten further.

For any leasehold flat acquisition in 2026, the building safety checklist includes:

  • The EWS1 form — status, rating and validity date.
  • Whether the building is registered with the Building Safety Regulator (for higher-risk buildings).
  • Service charge accounts — including any building safety-related costs or section 20 notices.
  • Building insurance — whether cover is in place and at what premium.
  • Any outstanding notices from the building safety regulator or local fire authority.
  • The managing agent or freeholder’s confirmation of the remediation position.

Bidq reviews building safety documentation, EWS1 status and service charge implications as part of every leasehold due diligence report. See how Bidq’s pre-bid legal pack review works.