The Growing Importance of Climate Change When Buying a Home

The impacts of climate change are becoming increasingly relevant in all aspects of life, including where and how we choose to live. 

For prospective homeowners, this shift brings a series of environmental challenges that are now impossible to ignore. 

Factors such as subsidence, flooding, coastal erosion, and mould are more prevalent and harder to address than ever before, presenting significant hurdles during the home buying and conveyancing process.

Understanding and navigating these risks has become a critical part of purchasing property, and this blog explores the key challenges climate change poses, how these risks affect insurance and lending, and the legal framework supporting conveyancing professionals in guiding their clients.

Climate Change Risks

1. Subsidence

Subsidence occurs when the ground beneath a property sinks, often due to changes in soil moisture caused by extreme weather patterns linked to climate change. Events such as extended dry spells or heavy rainfall can intensify this issue. When the ground beneath a home swells or shrinks, it can lead to severe structural damage, including cracked walls, uneven floors, and windows or doors that no longer close properly. Alarmingly, by 2070, an estimated 10% of UK homes could suffer from subsidence-related damage.

2. Flooding

Flooding is one of the most prominent risks associated with a warming planet. Rising sea levels, heavy rainfall, and overflowing rivers increase the likelihood of devastating floods, which can cause extensive damage to a property’s foundations, walls, and electrics. Shockingly, 1 in 6 homes in the UK is susceptible to severe flooding. For homebuyers, it’s vital to conduct thorough environmental searches, and, depending on the results, additional flood-specific searches to determine the level of risk.

3. Coastal Erosion

Coastal regions are under increasing threat due to rising sea levels, stronger storms, and accelerated coastal erosion. This is particularly problematic for properties in areas like Norfolk and Yorkshire, where erosion not only reduces property value but also complicates insurance policies, mortgage approvals, and future sales.

4. Mould

Mould thrives in warm, damp environments with poor ventilation. Climate change has exacerbated these conditions, making mould an escalating concern for homeowners. Apart from serious property damage, mould poses significant health risks, particularly for those with respiratory issues. Alarmingly, 58% of private renters in England already report difficulty with damp, mould, or excessive cold in their homes.

How Do Climate Change Risks Impact Insurance and Lending?

Climate change doesn’t just affect the structural integrity of properties; it also influences the insurance and lending landscape.

In high-risk zones, securing affordable insurance is becoming increasingly problematic. Some insurers are even declining to cover properties in areas with significant flooding or erosion risks, leaving homeowners exposed to costly damages.

Similarly, mortgage lenders are factoring climate risks into their decisions. Properties in affected areas may face steeper premiums or may not qualify for financing at all. Buyers and sellers alike must be prepared for potential delays or complications in transactions due to these issues.

What is the Relevant Legal Framework?

To support conveyancing professionals in navigating these challenges, the Law Society released its Climate Change Guidance Note in April 2023. This guidance was divided into two parts:

• Part A focuses on helping organisations adapt their business practices for a net-zero future.
• Part B is tailored to solicitors, emphasizing their duty of care and the need to disclose and warn clients about the risks of climate change.

This guidance underscores the growing responsibility on conveyancers to provide well-informed advice that incorporates climate risks, ensuring that clients are fully aware of the challenges associated with their investment.

Future Considerations

The Law Society is actively working to enhance the knowledge and resources available to conveyancers. A consultation launched in September 2024 explored how a new climate risk and conveyancing practice note could better support professionals advising on climate-related risks. Findings revealed that 76% of conveyancers feel they lack the confidence to discuss climate risks with their clients.

The feedback from this consultation will inform the development of a new practice note, expected to be published in spring 2025. This crucial guidance aims to address common issues faced by conveyancers, providing a clearer framework to help clients make informed decisions when purchasing property in a changing climate.

Making Climate Awareness a Priority

The significance of climate change in the homebuying process can no longer be overstated. From physical property damage to financial complications around insurance and lending, the risks are vast and far-reaching. Buyers should approach homeownership with these challenges in mind, conducting the necessary checks and seeking advice to protect themselves against the growing impacts of a warming world.

This blog was written by Tabitha Paley, Trainee Solicitor with MJP Conveyancing, exploring The Impact of Climate Change on Conveyancing.