What the heatwaves tell us about the future of conveyancing

Article originally published in Mortgage Finance Gazette on 30th August 2022

Europe’s rivers ran dry as scientists warned this summer’s drought could be the worst in 500 years.  In places, the Loire could be crossed on foot; France’s longest river had never flowed so slowly. The Rhine almost became impassable to barge traffic. In Italy, the Po was 2 metres lower than normal, crippling crops.  Serbia started dredging the Danube.  Across Europe, drought reduced once-mighty rivers to trickles, with potentially dramatic consequences for industry, freight, energy and food production – just as supply shortages and price rises due to Russia’s invasion of Ukraine bite.

That was the opening to a news piece I read recently.  It was followed by the forecast that a quarter of the US land area, home to more than 100 million people, will be subjected to perceived temperatures above 52C in three decades.

It’s alarming stuff for our continental and transatlantic friends but of course but this of great relevance to the UK, too – climate impacts have no borders.

Before the country was inundated with heavy rain, Sky reported the August heatwave was potentially more dangerous than the one in July – as the country became trapped under a “heat dome”.   The duration of the heatwave allowed dangerous levels of heat to build up, especially in buildings and urban areas.  A heat dome – when an area of high pressure stays over a large part of a region for days, or even weeks – acts like a lid on a saucepan, trapping hot air underneath, and can cause heat waves with temperatures well above the norm.  

Hot air expands vertically into the atmosphere then high pressure from above means it has nowhere to escape and pushes that warm air down.  As the warm air sinks, it compresses and heats up, which then traps more heat underneath. The ground then heats up and loses moisture which makes it heat up even more, and means it is ripe for fires to start.  Usually, winds can move the high pressure around but as the dome stretches high into the atmosphere, the high-pressure system becomes very slow moving, almost stationary.

The worrying thing is that this is unprecedented stuff.  Scientists dismissed comparisons with the UK’s 1976 heatwave, which peaked at just under 36C.  The FT talked to Imperial College climatologist Friederike Otto who pointed out that the climate had warmed significantly in the past 46 years, with the top 10 hottest years in the UK since 1884 all coming in the past two decades. “By definition,” Otto said, “’unprecedented’ means that it hasn’t happened before . . . there is no comparison to previously slightly lower temperature records.”

Indeed.  In July, temperatures reached 40C in the UK for the first time, breaking the record of 38.7C set three years ago in Cambridge.

And this is why lenders and their property lawyers need to rethink their attitude to potential conveyancing risks (none more so than Perenna, the UK-based specialist lender that has just been granted a licence by financial regulators to offer mortgages with fixed rates of up to 50 years).

Property solicitors are going to have to get to grips with the effects that geo-environmental risks in a changing climate will have on land and buildings – including significantly increased number of properties being affected by subsidence and flooding in particular – as well as coastal erosion and contamination.  There’s a significant probability of incurring a loss; and the scale of that loss is large.

According to the Environment Agency, 5.2 million residential properties in England are currently at risk of flooding, together with commercial properties and important infrastructure facilities.  Sepa (Scottish Environmental Protection Agency) estimates 284,000 homes, businesses and services are at risk of flooding in Scotland – and there’s a similar number in Wales while 45,000 homes are at risk of flooding in Northern Ireland. That means there are 5,774,000 homes in the UK that are at risk.  There are only 28.1 million homes in the whole country! 

This means conveyancers will be dealing with homes which have a 1 in 5 chance of being exposed to flood risk.  The average cost of a flood claim to insurers is £50,000.  Other risks impact far fewer numbers of properties and the scale of the threat to the property is less severe.

The desperately disturbing part is that when we polled conveyancers recently and asked them if they agreed that “Many property lawyers are unaware of the impact that climate change is already having and will have on UK land and buildings through subsidence, coastal erosion and flooding,” more than nine in ten respondents agreed (91 per cent).

I’d suggest that more understanding is needed on two fronts: the risks to the transaction from climate change; and the potential PI and legal risks to the practice.