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Land contamination could cost £11.5bn
UK property owners face potential liabilities of more than £11.5bn for cleaning up contaminated land says Searchflow.
Some 3% of all properties in the UK are affected by land contamination meaning 786,000 properties could be affected.
The average cost of cleaning up contaminated land is £250,000 per acre, meaning making right the average contaminated plot in the UK could cost £15,000.
The Environmental protection Act states that while the first person to bear responsibility for cleaning up of contaminated land is the person who caused it, where that person cannot be identified by a local authority, the person who currently owns or occupies the land will be held responsible for removing the contamination.
There are multiple options available to UK homeowners concerned about buying on potentially contaminated land. A number of insurance policies are available to residential property owners that pay out should any historical contamination be discovered on the site. Once purchased, these policies are passed down through owners of the home. Their value is fixed and unrelated to the value of the property.
However, insurance policies cannot protect homeowners from blight and the possibility of health consequences arising from unidentified property blight.
It is possible to obtain land contamination reports, which allow property buyers through their solicitor to find out whether land is affected by contamination at the conveyancing stage of a purchase. While the highest proportion of contaminated land is in former industrial parts of northern England, less than a third of these searches are undertaken in the north.
David Kempster, director of SearchFlow, said: “For those affected, land contamination is a financial hand grenade, which is often not picked up by conveyancers. Many homebuyers, especially those making their first purchases, have limited equity in their properties and so cannot borrow to cover the cost of cleanup work. Being hit with £15,000 of additional costs for a new house could be financially catastrophic and for those with plots larger than the UK average of 243 square metres, the expense could become even more unmanageable.
“As green belt land has been fiercely protected by local authorities in the last 50 years, a large proportion of UK homes have been built on brown field sites, which often contain multiple types of contaminant. This means the number of residential occupiers potentially at risk of major liabilities for land contamination is growing rapidly.
“Homeowners should bear in mind why cleaning up contamination is necessary. Contaminants in land can potentially have a harmful effect on the health of the people living on it, as well as expensive costs of decontamination. If contaminants leech out into neighbouring land, owners could find they are liable for the cost of cleaning up that contamination too. As far as buyers are concerned, it’s far better to avoid the problem of land contamination altogether than to face its discovery down the line. Making sure your conveyancer looks carefully into the possibility of contamination will pay large dividends in the long run.
“In the regions where there is the highest risk of purchasing contaminated land, due diligence searches are less popular than in south east England. It’s vital that homebuyers realise saving money on search fees during the conveyancing process can have disastrous financial consequences if they could have revealed that a property is on contaminated land.”
Simon Brooks wrote:
What an appallingly badly researched amd written article! As a contaminated land professional I take exception to the inference that any house built on land that wasn't previously greenfield means that suddenly the poor homeowner is liable for the full cost of any remediation! This is scaremongering and appears to simply be a way of selling a few extra "Searchflow" reports! Additionally, the supposed "average" cost of £250k per acre seems extremely high, please could you provide justification for this figure? In my experience only the most contaminated site would come even close to this figure!
20 July 2011 12:06:21 GMT
Recommend? (6)Local Authority Contaminated Land Officer wrote:
I agree that searches are important but its more important that the conveyancing solicitor pays attention to the results and consults with the local authority. We have recently had a situation where an unfortunate homeowner discovered their home was a former gas works whereas the solicitor at the time was adamant that it was previously only a gas showroom and therefore would not be affected by contamination. His bad advice has left the owners facing a proportion of £60k cost to remediate the garden.
20 July 2011 13:16:09 GMT
Recommend? (3)A nonymous wrote:
This is a totally irresponsible article. Obviously written in such a way as to promote the purchase of "searchflow" reports, by someone whom is poorly informed and has not done their research. Still, I suppose a factually balanced and correct article would not make for very interesting reading... at least no one was phone hacked for this article.. then again, does the Director of Seacrhflow know he is being quoted?
20 July 2011 14:56:37 GMT
Recommend? (5)Green Brain Environmental Consultancy wrote:
I agree that this is largely scaremongering, no doubt intended to sell more Searchflow reports and specialist home insurance. Most houses built on previously used land will have been screened and if necessary cleaned up. But some do slip through the net, so let the buyer beware! Always insist on a contamination history search before purchase, and if necessary hire a pro to help.
21 July 2011 08:56:13 GMT
Recommend? (0)Yuan Phoon, reporter at Mortgage Introducer wrote:
Thank you for the feedback guys. The article does not infer that “suddenly†a homeowner is liable for full costs of remediation. The paragraph says: “The Environmental Protection Act states that while the first person to bear responsibility for cleaning up of contaminated land is the person who caused it, where that person cannot be identified by a local authority, the person who currently owns or occupies the land will be held responsible for removing the contamination.†The research behind this is derived from the Environmental Protection Act 1990, part IIA s78F. For your convenience, here is the excerpt: “(1)This section has effect for the purpose of determining who is the appropriate person to bear responsibility for any particular thing which the enforcing authority determines is to be done by way of remediation in any particular case. “(2) Subject to the following provisions of this section, any person, or any of the persons, who caused or knowingly permitted the substances, or any of the substances, by reason of which the contaminated land in question is such land to be in, on or under that land is an appropriate person. “(4) If no person has, after reasonable inquiry, been found who is by virtue of subsection (2) above an appropriate person to bear responsibility for the things which are to be done by way of remediation, the owner or occupier for the time being of the contaminated land in question is an appropriate person.†Secondly, the average cost of £250,000 per acre is cited from Landmark Information Group who source their information from local and regional authorities, local development plans, Green Belt denominations etc (nearly 500 organisations throughout Britain). In response to the irresponsibility of the article, I would say that it is Mortgage Introducer’s role as a trade publication is to report the news regardless of how rosy or scary it is. We do not fabricate facts or figures, we report the news. The potential that UK property owners could face liabilities for contaminated land under law, is news. Suggesting that home owners should not take measures to protect themselves from incurring said liabilities is irresponsible. P.s. David Kempster is fully aware that he has been quoted. Mortgage Introducer did not hack his voicemail to acquire the quote above. Kind Regards, Yuan Phoon, reporter at Mortgage Introducer
22 July 2011 10:26:19 GMT
Recommend? (0)Another Local Authority Contaminated Land Officer wrote:
I liked that the article tries to increase awareness of land contamination. However, saying that ‘3% of all properties ARE AFFECTED by land contamination’ definitely implies that any land with a historical use should be assumed to be grossly polluted (i,e ‘contaminated’). Many sites only contain small amounts of residues or may have been remediated. Conveyancers are variable is how much they can/do advise clients.
12 September 2011 15:12:34 GMT
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