Environmental & Utilities - OneSearch

We would like to share the Q2 edition of Landmark’s Property Trends Report, which provides a complete summary of the 2021 property transaction pipeline from listings through SSTC, search and finally completion milestones, compared to 2019.

Surges and slowdowns in activity have aligned to major government announcements and deadlines.

Property search orders were up 43% in April 2021, compared to the same month in 2019, as buyers rushed to benefit from the Stamp Duty Land Tax holiday.

Other insights include:

Listings were down on average by 5% at the half year point
SSTC activity was 22% higher in April 2021 vs April 2019
Completions in June were 85% higher compared to the same month in 2019

On this occasion, we are also adding our Completions to Instructions Ratio (CIR) report, which is an indication of overall workload, where we are reporting:

A ratio of 115%, which demonstrates the extraordinary pressure conveyancing lawyers were under and the incredible way they delivered results for clients.

We hope you find our trend reports useful. Please CLICK HERE to access a copy of the Property Trends report.

Welcome to week two of our Risk Series, where we examine the top five conveyancing risks in more detail.

Each week we will analyse a different risk, and will discuss further in the Q&A session of our upcoming webinar. Today our focus is on Flood Risk, written by Mark Taylor, Channel Manager at Landmark Information and environmental auditor with the Institute of Environmental Management and Assessment.

Flood Risk: Are we doing enough to protect ourselves and our assets?

A flood is the most effective and indiscriminate ‘burglar’ there is. It will take everything you have, including items of no value to anyone else.

I’ve not been the victim of a flood myself. My experience of flooding fortunately has been from an armchair. However, as we move to a more hostile and unpredictable climate, it’s impossible to ignore. You only need to look back to last year to see several records broken.

Feb 2020: wettest February on record dating back to 1862, with 3 storms hitting the UK (Ciara, Dennis, Jorge). Previous record from 1990.
May 2020: driest May on record (Carbon Brief Ltd, 2021).
October 2020: 3^rdOctober became the wettest day on record for the UK (Met Office, 2021).

Flooding is not a recent phenomenon. It’s a natural event that would have occurred since rivers graced the landscape. Unfortunately, it’s now something that is ingrained into life for some of us. Its impact on our society in areas of the UK are significant. The causation is simply what would be considered now as poorly planned development, in areas at risk without suitable, sustainable mitigation. Development took precedent over understanding risk and if appropriate, risk management.

It’s not just the location of the development which has been key in increasing flood risk. Settlements characterised by concrete and tarmac have broken the natural hydrological cycle, increasing run-off and preventing infiltration. Watercourse have been over engineered, straightened and diverted into shorter, man-made channels resulting in less volume, higher erosion and higher discharge rates.

The result of this is millions of people and businesses at risk in any given year

Our causation of this issue has left us in a place where flood risk can’t be unacceptable. That stance is now impossible, albeit it could be applied to planning and new developments if we wanted to take a very firm stance. This would be difficult especially with a necessary focus on brownfield development and urban regeneration. Flooding now has to be seen as a scale of risk. What is an acceptable frequency of risk for us to be exposed to?

In reality, this will vary person to person however regulators need to take a stance. Given over 5 million properties are at risk it’s impossible to be so black and white.

In some areas of the country, risk can be argued as being unavoidable. For example, in Boston Borough Council, over 90% of properties located in the borough are deemed to be within a Flood Zone 3 area. This is followed by properties in Kingston upon Hull City Council, South Holland District Council, London Borough of Hammersmith and Fulham, at c. 90%, 77% and 62% respectively.

It’s important to note that this data only shows the percentage of properties located in a Flood Zone 3 area. It does not comment on any additional precautions taken to mitigate such risks. However, on the counter side of this argument, it also only assesses risk from two mechanisms, fluvial and tidal and omits pluvial (surface water) and groundwater risk areas.

Given both the impact and cost of flooding, are we:

Taking it seriously enough during the homebuying process?
Doing enough to protect ourselves from risk where it exists?

Are we taking risk seriously enough?

The scale of risk across the UK is quite a well understood entity. We know that over 5 million properties are at risk of flooding. Less known is that because of the impacts of climate change, some suggest this could increase to 1 in 3 (RIBA, 2021).

Climate change is going to result in increased risk from both a storm ferocity and regularity standpoint and whilst climate change is expected to bring longer, dryer summers, it’s also predicted to result in longer, wetter winters.

Despite this, even considering the scale of risk now, the frequency of events and how they are reported in the media, at the point of buying a home or investment, there is a strong position to argue that the answer to the above question is “No”.

According to the Law Society’s website: Practice notes give you guidance on a range of important legal topics, helping you give your clients the best possible advice. They set out our view of good practice for our members.

The Law Society Practice Note on flood risk has been around since 2013. Despite this, is there still a barrier to understanding flood risk as part of pre-acquisition due diligence?

With less than 30% of residential transactions annually carrying out a proper flood assessment, it seems there might be.

Given the significance of flood risk and the impact it can have on property value, insurance terms and (often overlooked) mental well-being, surely if this was a valued risk the percentage would be a lot higher than 30%? If we look at the commercial market, flood risk is taken a lot more seriously with the percentage of transactions with a full flood assessment closer to 60%. Furthermore, the impact on climate change on flooding is already becoming a talking point amongst the investor community as environmental, social and corporate governance (ESG) and sustainability move up the agenda within the industry.

The price of conveyancing inevitably has an impact on the take up of flood reports, due to what is an ever-increasingly competitive market.

To account for this, flood reports that screen risks and are purely based on data dominate the residential market, whereas in the commercial space, combined environmental reports do. While these types of reports, like Landmark’s Envirosearch provide excellent insight into risk, when a risk is identified it’s important that flood risk is assessed and reported in more detail beyond that of basic and limited automation.

However, where I think we need to get to is the view that the small added cost at the beginning shouldn’t be a barrier. A flood report should be an enabler to the transaction especially as its cost will be negligible in comparison to any excess paid on a flood claim, and the disruption to someone’s life.

Are we doing enough to protect ourselves from risk where it exists?

Answering this question is tricky, especially from a legal due diligence standpoint as its remit is providing information on risk to in effect, inform someone else’s decision. Again, people’s appetite to risk will always be intrinsic and balanced against what they perceive the value to be and what is important to them.

One issue skewing this, though, is how risk is often portrayed. For speed and ease of interpretation, too much focus is on providing a simple answer rather than explaining risk. This can be highlighted by what we often assume low risk is. We assume low risk pretty much means no risk and when reported we don’t bother reading further. In fact, low risk maybe as a result of defences and without them, a high risk could exist. As we know all too well in the UK, defences aren’t perfect and low risk areas can and do still flood if they’re reliant on physical barriers holding flood water back.

However, focussing on the question at hand, given the UK’s position on flood risk and that it’s a property owner’s responsibility to protect their property from flooding, do we acknowledge and subsequently act on this?

Yes, the government plays an integral role in managing and reducing risk, the Department of Environment and Rural Affairs (Defra) having overall national responsibility for policy. But do we truly accept responsibility for this issue, and if not, why not?

Within this space I think more can be done by flood risk report providers. However, search providers do need to walk along the fine line, ensuring the needs of the industry are met (short, concise and clear), as well as discussing the key mechanisms for managing risk set out in the Law Society Practice Note, and insurance.

Insurance is vital in managing flood risk. It plays an intricate part in flood risk management, even more so since Flood Re was established to provide cover for those at greatest risk. However, insurance is still only reactive, only relevant once the impact and disruption of flooding has already happened. Really, more proactive measures need to be taken to aid insurance to not just manage risk exposure, but to reduce its overall economic and human impact.

Many of us happily invest in smoke alarms and security locks to protect ourselves against fires or thefts; but if you live in a floodplain, you’re far more likely to be flooded than have your belongings lost in a fire. Yet, when it comes to flooding, we don’t seem to value the risk in the same way and as a result, prepare.

What is within the Conveyancer’s control?

There’s more within our control than perhaps we think. Not all environmental or flood risk searches provide the same level of quality to the conveyancer. This fact is often overlooked, which is understandable if you’ve ever held two searches up together and tried to understand the differences.

Flood data itself has come on leaps and bounds from where it was only a decade ago. However more importantly, the interpretation of data in flood risk reports provided by the likes of Landmark and Argyll Environmental have also evolved dramatically.

One thing a conveyancer can do before affirming a policy on searches, especially in regard to flood risk is ask the question: Where has this assessment come from?

Yes, data plays an integral part and is the foundation of environmental reports. However, an assessment and the advice within should come from interpretation. From a consultant. This is what is unique to Landmark residential flood reports. This is the real value in an assessment at any level.

As standard, Landmark flood reports offer a manual review of data by a consultant where a high risk may exist, at no extra cost. This is within both the Landmark Flood report and the market leading All-in-One environmental report, RiskView Residential.

This ensures that, as a conveyancer, you’re only ever providing property specific and accurate flood assessments to your clients, provided by experts in flood risk data.

FREE WEBINAR

RiskView Residential: Efficient environmental due diligence

The stamp duty holiday created huge, unsustainable pressure on the conveyancing industry.

One key topic that has arisen from it is: how do we achieve more efficient conveyancing? How can we obtain and communicate the key information and risks relevant to the transaction in a faster, more concise manner?

Join OneSearch and Landmark for one of two 30-45 minute sessions to discuss how we can help reduce time spent obtaining and reviewing searches, whilst providing greater risk transparency and saving your client money.

We’d be delighted answer any questions you may have. Please email your questions to intro@onesearchdirect.co.ukin advance and they will be answered during the webinar.

Wednesday Aug 11, 2021 11:00 AM BST

Wednesday Aug 18, 2021 11:00 AM BST

If you cannot make either date, and would like to receive a webinar recording, please click here.

Key References:

Today we launch our Risk Series, to examine the top five conveyancing risks in more detail.

Each week we will analyse a different risk, and will discuss further in the Q&A session of our upcoming webinar. Today our focus is on Ground Stability.

Subsidence: what is it? What causes it? And how can you find out if you are affected?

Subsidence is a common problem in the UK and is defined as the vertical downward movement of the ground. If a building is located above, this will result in the damage to a building and its foundations. Subsidence is thought to affect up to 20% of residential properties in England and Wales. This is costly to the insurance industry with over 10,000 homeowners making claims worth £64 million, and in the summer/autumn of 2018, saw a ten-fold increase in subsidence claims associated with the heatwave. (1). The area most affected by subsidence is in the South East of England largely down to the properties being built on clay rich soils of the Wealden Formation and are subject to changes in shrink and swell from varying moisture content.

Causes

Subsidence can be caused naturally or can be man-made. Typically, subsidence is caused by the addition or removal of water and vegetation, and when these are combined with weight, angle of slope, gravity and geology, can result in a variety of subsidence issues.

Water plays a huge part in subsidence and can have a number of implications to the underlaying geology. Changes in moisture content affects clay minerals which are prone to volume changes and can result naturally and from man-made issues. Clay minerals will absorb water when wet (making them swell) and lose water as they dry (making them shrink) and is one of the most common causes of subsidence costing the economy an estimated £3 billion over the past decade (2)

Changes in water content can occur naturally, via seasonal variations of wet winters and dry summers. The heat waves in 2003 and 2006 led to peaks in subsidence claims. The summer of 2018 was reported by the Association of British Insurers (ABI) to cause highest quarterly jump in subsidence claims for more than 25 years, where over 10,000 households made claims worth a total of £64 million during July to September in 2018 (ABI, 2018). Climate change is expected to increase these extremes of wet/dry periods and is likely to see an increase in subsidence claims associated with shrink-swell mechanism.

The addition of water from leaking drains, changes of surface drainage and landscaping can result in either increased weight (and increase in gravitational pull) overcoming frictional forces resulting in a landslip, it can also cause the ground to soften and compress under the foundations but can also cause soil particles to wash away beneath foundations and result in instability.

Water, typically rainwater, which is slightly more acidic, can attack alkaline geological formations, typically chalk and limestone by dissolving the minerals. Within the ground, this can form a cavern or cave passage. As the cavern becomes larger, this starts to cause the geological layers above to start to sink, and over time they may slowly slump into fissures (if sandy), or if formed of clay, the cavern below can become much larger before collapsing into the ground causing a drop out sinkhole, which is usually reported in the news. Typically, sinkholes are located the Mendips, parts of Wales, the Peak District, and the northern Pennines including the Yorkshire Dales, where there are underlying limestones. Also, in parts of Dorset, Hampshire, Sussex and the Chilterns where they have younger Clay-with-Flint deposits above the Chalk. Sinkholes can also occur in salt deposits such as Cheshire where brine is extracted.

Vegetation, most notably, trees can cause subsidence in a number of ways; they can draw water out of the soil causing it to shrink, as above. A mature oak tree can draw up to 1,000 litres per day. The second way is through the displacement of soil as the root grows within the ground, pushing up foundations. Vegetation, typically plants with dense root systems can help bind non-cohesive soils together, however if these are removed, can cause the ground to loosen and move.

Changes in weight above the ground can also result in subsidence. Usually when a new build property is constructed, there is a period whereby you can expect some compression on the ground. Insurers typically wouldn’t accept a claim for natural compression unless it is found that the foundations or structure of the building wasn’t constructed to building regulations standards. Changes in weight can also be caused by the addition of water or vegetation.

Should we be concerned about subsidence?

As we know most houses will experience some settling for short time after its been build as the ground is compressed due to the new structure. However, with new builds, we often assume that due diligence is completed by the developer before a housing estate is built and mitigation is carried out beforehand. More land is being developed on, and the supply of suitable land is limited.

On 7 November 2019, a landslide occurred on a disused quarry slope in Mansfield. The landslide affected over 35 properties and 60 people had to be evacuated.

The Berry Hill housing estate was built between 2003 and 2011 within a former sandstone quarry. Two roads were built very close to a steep quarry slope (15-19m away from a 25m high slope). Mansfield District Council reported that the gardens extend to the base of the slope, with a 3m exclusion zone designed to allow small-scale block failures and localised washouts and slumps. However, the landslide which occurred as termed a block fall, followed by an earth/debris flow, which covered the majority of three residential gardens. The landslide was caused as a result of intense rainfall and 6 months of above average rainfall which ultimately also caused flooding in Yorkshire and surrounding regions. Much of the geology in this area is composed of weathered sandstone and this became unstable. In addition, artificial ground, on top of the quarry slope was deposited from the quarry and this also became unstable.

Properties can also be built above historical mining areas which can cause instability. The Bayfield estate in West Allotment, North Tyneside which was built in 2011 is an example of this.

After its construction, subsidence and cracking were being reported in 2015 and was investigated resulting in families being evacuated in June 2016, and later permanently relocated in January 2017 when it was found that severe subsidence issues were identified.

The Coal Authority were involved in the investigation, and it was found that there was an unrecorded mine under the development which heavily extracted coal by up to 70%, leaving huge extraction cavities under the ground, held up by narrow pillars and shallow ceilings causing roof instability. After this investigation, 15 properties on the housing estate had to be demolished.

Who pays for the subsidence issues?

The Government has advised planning authorities, through Planning Policy Statements (PPS) 1 and 12, that the planning system must regulate the development of land. Planning Policy Guidance 14 sets out how slope instability should be considered in any planning application and if landsliding has been identified or is a known issue then the developer must provide evidence that any development activity will not exacerbate landslide activity and that any building will be safe. Therefore, the liability can be on the developer.

In the case of Berry Hill estate, the council were happy that planning conditions had been met for the Berry Hill Quarry Development, and the council commissioned specialist consultants to clear the 1,300 tonnes of material that slipped, tree removal, and install blocks and bunds to give temporary protection to the affected properties. The council also provided claim forms to the affected residents for property damage and recompensed the residents.

For the Bayfield Estate, under the Coal Mining Subsidence Act 1991, meant that the Coal Authority has liability for historic coal mining subsidence claims and the damage claim paid out to the homeowners on the Bayfield Estate was the largest single event we have ever dealt with.

Buildings insurance is not compulsory but is necessary in areas affected by subsidence and will provide financial help in an event of a landslide or subsidence damage. This is particularly important for older properties built on landslide susceptible areas before planning guidance was implemented in 1990 and those outside of their 10-year building warranties such as NHBC.

But property owners are also responsible for not causing damage to their property or that of others by exacerbating landslide hazards, and if it is found that the property wasn’t appropriately taken care off, insurance and building warranties may not pay out.

How can I find out about subsidence?

Whilst there are datasets out there on landslides, these aren’t always easy to interpret and do not come with any PI cover. If you are acting for a client within a property transaction, it is best to order an environmental report which addresses subsidence issues. This report should provide information on the risk of all forms of subsidence issues, infilled land, mining and subsidence claims data. Landmark Information Group provide such a report within RiskView Residential and can be ordered as part of a standard pack. If subsidence is identified, it is then best to seek advice from a RICS Charter Surveyor to conduct a building survey.

FREE WEBINAR

RiskView Residential: Efficient environmental due diligence

The stamp duty holiday created huge, unsustainable pressure on the conveyancing industry.

We’d be delighted answer any questions you may have. Please email your questions to intro@onesearchdirect.co.uk in advance and they will be answered during the webinar.

Wednesday Aug 11, 2021 11:00 AM BST

Wednesday Aug 18, 2021 11:00 AM BST

If you cannot make either date, and would like to receive a webinar recording, please click here.

Key References:

Today’s spotlight shines on Angela, who is part of the ever-growing cohort of veterans in the OneSearch family, having been with the company for an incredible TWENTY ONE YEARS. Angela is our Deputy Data & Highways Manager and has consistently gone above and beyond, especially during this pandemic. Thank you, Angela!

Take it away…

What does a typical working day look like for you?

I’m sure everyone says this but no two days are ever the same – it would be rather dull if they were. There are lots of daily and weekly tasks, so you can find me swapping my Highways hat for my Data hat throughout the day.

Over a year ago, a typical working day started with the usual mad dash out the door to catch the train. Everyone has been struggling in their own ways with Covid, but I certainly don’t miss that train journey. Nowadays I have a much less hectic start to the day, logging in at 7am while the rest of the house sleeps, meaning a peaceful start. That is very short lived though, as the rest get up 7.30am.

What’s the best thing about your job?

Wait… you want me to pick just one?

JUST FOR FUN

When not in the office, you can usually find me here:

Due to Covid you can usually find me at home on the sofa or, if Scottish weather permits, in the garden… on a garden sofa!

If Covid wasn’t in the equation you would find me socialising with family and friends, shredding and playing taxi driver to my overactive 12 year old.

Three things I would struggle to live without are:

Family
A decent decaf coffee and cake, or tea and biscuits… depends on the mood really
The ability to explore the Scottish countryside or further afield when permitted

(Yeah that’s way more than three but it’s the simple things really!)

My last meal on earth would be…

This is really hard… when it comes to picking a meal I’m so indecisive, so don’t think I could narrow it down to one meal or even a three-course. It would need to be a huge feast with loads of my favourite things. For me it would be more important who I shared my last meal with.

To finish, Angela would like to introduce us to her adorable bunnies, Jackson and Riggs. smiley

To see the rest of our Spotlight Series, click here.

Additional Datasets

From Tuesday 6th April 2021, the following additional datasets will be included in Landmark Energy and Infrastructure reports:

Southampton to London Pipeline route
Above ground railway lines and stations
Underground railway lines and stations including:
London Underground
Docklands Light Railway
Tyne and Wear Metro
Glasgow Subway
Merseyrail

These additional enhancements will be added to the following reports:

These changes do not require any actions from you. If you have any questions about these forthcoming changes, please get in touch.

The SRA have reported that in the first half of 2020, nearly £2.5m of money held by firms had been stolen by cybercriminals, over three times the amount reported in the first half of 2019.

Remote working has created an extra layer of vulnerability for any business. With this, we would like to invite you to our free webinar, in association with Lawyer Checker, to discuss the latest updates on risk.

Combating Conveyancing Fraud – Update on risk
Thursday, February 25th 2021 @ 11:00AM GMT

In this webinar hosted by Tom Lyes from Lawyer Checker, we will be looking at the current threat level of fraudulent activity in the sector and why Lawyer Checker is more than just a bank account checker.

Tom will share some of the reasons behind the significant growth of firms ordering Lawyer Checker over the last 12 months and discuss how Lawyer Checker, in collaboration with OneSearch Direct, can help you and your conveyancing team to ensure you are working in the most compliant and safest way possible.

Sign up for this webinar here.

If you can’t make this date, but would like a recording afterwards, please click here.

The top 5 questions to ask yourself about the dangers of cyber crime

With many staff still unable to come into the office, here are 5 questions to help you consider where your business is now in terms of ongoing cyber security:

How up to date are your current cyber security policies?
Do these policies take increased home working into account?
Do you know if the home network of your employees is secure?
Are there any new or emerging cyber threats to be aware of?
Do you have the expertise in-house to deal with cyber security or do you need to outsource to experts?

Learn more in our article: Does your firm have a basic cyber security strategy in place? Click here to read and find out how we can help you and your firm.

Is cyber crime getting worse? Read our Industry Interview with Tom Lyes from Lawyer Checker here.