Landmark Information Group brought together industry experts including Birmingham Law School, The Lettings Industry Council and JBA Risk Management to warn of the impact of climate change on the property market in a new report which highlights the challenges professionals are facing in meeting energy efficiency requirements for homes, as well as environmental damage such as coastal erosion, flooding, and shrink-swell subsidence.
Both risk areas will require the industry to adapt the way it works and adopt a unified process for reporting climate risks and improving the carbon footprint of homes.
According to the report, these risks will have implications for every sector across the property industry, influencing how lenders determine mortgages, and how estate agents price a property for sale or rent. It will also impact how surveyors make assessments and recommendations, and how conveyancers manage expectations to provide consumers with advice.
Some of the most imminent risks the industry will have to consider highlighted in the report are:
Flooding
· In the UK the current annual damages from coastal flooding are estimated at over £500 million per year1, with costs likely to increase under projections of sea level rises.
· JBA Risk Management also warn an estimated increase of 87% in average annual losses to UK properties from flooding by 2050 if no action is taken to reduce emissions, and a further £2bn without effective flood defences.
Coastal erosion
· The British Geological Survey has warned that the loss of land and removal of sediment along the coastline is predicted to cause a national loss of 7,258 km2 by 20502, with areas such as North Norfolk, the Yorkshire coastlines, Dorset and the Jurassic coast at particular risk.
Shrink-swell subsidence
· According to the British Geological Survey, ground movement caused by changes in rainfall and local drainage is one of the most damaging hazards, costing the economy an estimated £3 billion in the last decade.
Energy efficiency requirements
· There are demands and requirements both from Government and consumers to improve the energy efficiency of homes to ensure the market contributes to net-zero. Despite targets to retrofit 60% of properties with better insulation by 2050 and for homes to be rated EPC C or above, the lack of a roadmap on risks these targets not being met.
Chris Loaring, Managing Director, Landmark Legal said: “The impact of climate change is already being felt and the demand for action has never been greater. For the property industry, we have all been trying to ‘crystal ball gaze’ into the future, attempting to untangle the potential risks and decide what this means for home buying.
This report has made the action clear - what we need now is a unified process and provision of data so that each sector across the industry is empowered to manage the risks of climate change, and together we can secure the future of the property market.”
Simon Brown, CEO, Landmark Information Group, said: “As an industry, many of us have already been addressing climate change risks. However, we have been tackling these challenges in isolation for too long. It is clear we have reached a critical point where we need to work together to understand and question whether we are measuring the right things, in the right way and at the right time.
"As a provider and partner to all parts of the property industry, Landmark has always sought to unify the sectors and connect our data. When it comes to managing the risks of climate change, we are even more motivated to bring together the parties that can and will make a difference for property.”
Professor Robert Lee, Birmingham Law School, said: “Alongside the physical risks posed by climate change, transitional risks will emerge as the property sector is forced to respond and adapt. The impacts will be challenging both for the domestic and commercial sectors.
"In this report, there is a strong call for a unified and harmonised response from property professionals. This collection will help lead the way in this direction.”
The British Geological Survey (BGS) also contributed to the report, highlighting the importance of geoscientific data in understanding future climate change and providing an outline of the tools and data available to enable the property industry to respond to climate change risks.
Kathryn Lee, Team Leader, Product Development, Hazard and Resilience Modelling, British Geological Survey, said: “It is likely that climate change will continue to be a major societal problem, with effects that will last many years. Our data and analytics will be instrumental in understanding these natural processes and tackling these issues so that society can better adapt. Our focus is to ensure we apply climate change science to the products and datasets we provide, to communicate spatial and temporal changes in geohazard susceptibility to all data users.”
