UK homeowners could be hit with a bill of £11.5 billion for cleaning up contaminated land.
A survey conducted by property search provider and conveyancing experts SearchFlow, revealed figures showing that 3% of all properties in the UK are affected by land contamination. Many of these homeowners may not even have caused the contamination but will still be held liable for the cleaning under the Environmental Protection Act 1990.
The act states that responsibility for cleaning up any contaminated land falls to those who have caused it but the peril lies where this cannot be determined by a local authority – the person who currently owns or occupies the land is then liable for the cleanup.
The average cost of cleaning contaminated land is about £250,000 per acre and, given that an 768,000 of 25.6 million separate dwellings in the UK could be affected, the average clean up per residential plot would come to about £15,000.
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 equitiy 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.”
However, it may not be so bad for some as a ‘suitable for use’ approach is currently being taken by the government and local authorities will only force the current occupier to clean up contamination if the risk posed is considered to be ‘unacceptable’.
Mr Kempster also gave reasons as to why contaminated land could pose such a large risk to homeowners: “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 brownfield 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.
In many cases, the contamination dates back many years and identifying past owners and proving that they caused the contamination could be very difficult indeed. In these situations, buyers of large plots could find themselves facing huge costs.”
Residential property owners can protect themselves to a certain extent as there are a number of options available when dealing with land contamination. There are insurance policies that will pay out if any historical contamination is found on the site and are passed down through the home owners. However, their value is fixed, not related to the value of the property and will not protect homeowners from any health consequences arising from any unidentified property blight.
David Kempster comments: “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. ”
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