Climate Change and your property – what you, your solicitor and lender need to know!
How will climate change affect my property?
We all know about climate change. It’s a topical issue that’s mentioned in the news almost every day – and for good reason – it’s getting worse, and it could even affect the value of your property.
With climate change on the rise and the potential issues identified concerning buildings and land, it’s no wonder that both solicitors and lenders are focusing their attention on how climate change might affect a property.
The statistics are stark:
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flooding is projected to impact 2 million homes in 5 years’ time, and this figure rises dramatically to 3 million homes in 30 years’ time;
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449,000 homes are predicted to be affected by subsidence in 5 years’ time, with this figure rising to 2 million in 30 years’ time;
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10,800 properties will likely be affected by coastal erosion in 5 years’ time, with 42,000 properties expected to be affected in 30 years’ time.
It’s clear to see why purchasers and lenders alike are concerned about the impact that climate change could have on a property’s value. With lenders now taking a keen interest in the climate change risk factors, it’s vital that we understand those risks.
What do I need to look out for?
Most environmental search results now come with a climate change risk assessment.
The risk assessment will grade the property on an A – F scale:
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‘A’ and ‘B’ – meaning that no further action is required;
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‘C’ – meaning that some minor issues have been identified; and
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‘D’, ‘E’ and ‘F’ – meaning that the property did not pass the climate search and has significant risks.
A failed search result could result in issues obtaining insurance and mortgage lending.
The climate risk assessment doesn’t just assess the physical risks posed to a property, it also assesses ‘transition risk’ (the impacts of policy or legislation, such as EPC regulations or emissions) and ‘liability risk’ (a customer or company seeking damage losses, including a loss of value, suffered as a result of the physical or transitional risk related to climate change).
If you have any questions about how climate change could impact your commercial property, speak to the Commercial Team at Lawson West.
Contact us 0116 212 1000
