Q & A with Philip Wilbourn
The latest RICS professional information paper on flooding ‘Flooding: issues of concern to RICS surveyors and valuers (Residential property) 1st edition UK information paper (IP)’ reviews the transitional phases of legislation relevant to flooding and raises awareness for RICS property professionals of market risk – in particular that of insurability.
The practice-based document is applicable to conveyancers as it reviews the types of flooding posing a risk to residential property, and the information sources that may be available to both practitioners and consumers.
We talk to Philip Wilbourn of Future Climate Info and contributor to the RICS paper, about the implications to conveyancers, and his view on how the latest information will affect the conveyancing market.
How would you define flood?
I think the DEFRA consultation on the Flood Re Scheme gives a clear definition. It suggests a definition of flood as:
- “Flood” as currently defined in the draft regulations, means water from any source external to the property which enters the property at or below ground level
- AND does so with a volume, weight or force which is substantial and abnormal.
What are the different mechanisms of flooding conveyancers and their clients should be aware of?
The main sources of flooding that affect residential dwellings are:
- Coastal and River, where defences can be overtopped or breached by a combination of low pressure weather systems and peak high tides. Flooding also occurs in the floodplains of rivers when the capacity of water courses is exceeded as a result of rainfall or snow and ice melts within catchment areas further upstream.
- Surface flooding which is caused by rain water runoff from land with low absorbency (which causes over half of flooding in an average year).
- Ground Water flooding – this can occur in low lying areas sitting over permeable rock which can contain or transmit groundwater and
- Sewage flooding which is a flood issue that isn't covered in most environmental reports as the data is held with the water company responsible for the sewer network for that area.
How does Flood Re differ from the Water Act 2010?
Flood Re follows on from the Water Act 2010 and is expected to roll out in July 2015.
Are there any properties that are exempt from Flood Re?
Flood Re does not apply to commercial property; neither does it apply to leasehold properties which may include blocks of flats or the private rented sector. In addition, it doesn't apply to small and medium sized enterprises. It must be noted that houses with Council Tax Bands H & I are now included within Flood Re.
However this only affects some 3,400 of the most expensive waterside properties. All these exclusions make some of our prime assets vulnerable because of the issues and challenges raised by Basel III where the banks have to take a high level view of their capital adequacy.
Will this change the way in which surveyor's value properties?
YES-Surveyors are mindful of their PII and they can only value a property based on the information provided by the solicitor, conveyancer, lender or mortgagee.
If further information becomes available it may affect the valuation, and should therefore be shared with the relevant parties.
What happens after the 25 years Flood Re term ends?
The end of the 25 year term will see a transitional release to open market pricing where homeowners will be at the mercy of the insurance market. In the long term we may see the Government invest more in Flood Defences to protect those ‘high-risk’ properties.
Will this effect mortgages?
Undoubtedly yes, as the banks enter a climate of being risk-adverse as opposed to being risk-aware.
How and where can a conveyancer obtain a flood report for their client?
Flood report can be obtained from an environmental search provider. Future Climate Info has created an innovative suite of Environmental Reports on Contaminated Land, Flood, Ground Stability and Energy & Infrastructure. Future Climate Info’s reports provide extensive data, full risk assessments, clear solutions, and a concise summary.
About Philip Wilbourn
Philip Wilbourn is Director of Future Climate Info and provides the Professional Opinion on FCI’s suite of Environmental Reports, which reports on Contaminated Land, Flood, Ground Stability and Energy & Infrastructure.