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What is an environmental search?
An environmental search ascertains whether any environmental factors pose a risk to the property or its inhabitants. It’s a common misconception that an environmental search involves physically inspecting the land. In practice, the search report is based on current and historical records held by the search agency.
See also: What are conveyancing searches?
Do I need an environmental search when buying a house?
Most lenders insist on an environmental search if you buy with a mortgage. However, for cash buyers, the answer to whether you need one is no – BUT it’s nevertheless strongly advisable. I’ll explain why.
Why are environmental issues relevant when buying a house?
Environmental issues are increasingly relevant for buyers, mortgage lenders and insurers. And even a cash purchaser may need to consider mortgaging the property later. Factors such as flooding, subsidence, and land contamination can determine whether a property is mortgageable and insurable – and affect its value, often significantly.
Many new developments are built on or close to land previously used for industrial purposes. Even decades after that land use ceased, ground contamination can still pose a significant risk to health. In addition, subsequently discovering your home sits on contaminated land can render it unsaleable.
The importance of an environmental search
Health issues aside, if land is found to be contaminated and the person, company or organisation responsible cannot be found or no longer exists, the local authority can look to the current property owner to pay the clean-up costs. Inevitably, these will be very high. For example, the presence of coal tar or heavy metals in the ground requires specialist contractors to remove all affected topsoil.
An environmental search also considers the property’s risk of flooding. Flood risk impacts the property’s value, mortgageability and insurability. In particular, if the property is in a high flood-risk area, it’s crucial to investigate whether home insurance is available and, if so, the likely premium.
What if my environmental search highlights a risk factor?
Whether and how to proceed with your purchase in light of a highlighted risk depends very much on the nature of that risk and any likely remedial costs. Those factors must be considered carefully with your conveyancing solicitor who must also report back to your mortgage lender, if you have one.