Potentially Contaminated Land

Needtoknowasap

Hi,

I'm a newbie, so please forgive me if anything goes wrong with this post.

I am purchasing a property in South London. My solicitors did a local authority search and envirosearch and the property came out as being built on 'Potentially Contaminated Land'. It's not contaminated, just POTENTIALLY contaminated if that makes a difference.

I love the property and it's within my budget and the bank have offered to loan me the money. I don't want to pull out.

I've have been offered a full land indemnity policy to cover all future work and any issues in terms of value.

My question is whether my lender will accept this or will they just refuse the mortgage when I tell them about it which I have to according to my solicitor.

If anyone has had any particular experiences with the main banks i.e. Barclays, HSBC, Santander, Halifax that would be especially useful.

Please let me know what you think.

Cheers aplenty!!

Anne

bargainbetty

It will depend on the type of contamination and the risks. Have you have a full local survey done? This might flag up what is actually there or not.

Is it a completely residential area - have a look online to see what has sold recently on your new block - it might show that recent transactions have been completed, which would show that they can be sold without major concerns.

Needtoknowasap

Thanks, Bargainbetty!

I had the 'envirosearch' done and it was then 'referred' to a sort of surveyor, I think.

It is a completely residential area with lots of houses, flats, shops etc.

Apparently, there was an industrial useage in the 1960s but the property was built in the early 1990's so I would have thought the people who built it would have had to sort out any problems first.

The surveyor said that I could buy insurance or alternatively get some clarification from the local authority. I understand that it wasn't asbestos or anything like that, just an normal industrial useage like a non-toxic factory or something.

I was told by my solicitor the insurance was absolutely fine as it covers everything that might happen so I bought that.

There has been other properties sold nearby but doesn't it all depend on the lender if they agree or not to proceed? How strict are they with this sort of thing?

Riggster

1. Wouldn't worry about it too much.
2. Take your solicitors advice and let them keep your mortgage lender happy (your solicitor has a duty of care to the lender as well as you).
3. Make the bloody vendors pay for the indemnity policy!

Needtoknowasap

Thanks Riggster!

Can't help stressing - so close and yet so far :mad:

I'm fine with the house as I think it's lovely, in a nice quiet area and the garden is especially nice as it's is everything I would have hoped for, but....

....it's all up to the almighty being that is my mortgage lender and whether they'll agree to let me have the mortgage on this property of whether they'll just say 'no' outright and refuse to lend.

I'm getting more and more concerned that they'll just think 'oh, potentially contaminated eh? Hmm no, we can't lend on it' or worse, some 17 year old junior might go 'hmm don't know what that is, can't be bothered to find out what hat is....so no anyway!'

The issue is the bank and I would be grateful if anyone who's had to deal with a bank in this situation could let me know what happened.

Thank you so much,

Anne :cool:

Riggster

Let your solicitor deal with them! They can explain the situation to the bank and establish whether they are happy, or whether indemnity insurance or something else needs to be in place to make them happy.

Solicitors are good at this sort of thing...

And remember if you can't get a mortgage for a property, that's probably a good indication to walk (run) away.

Richard_Webster

Your solicitor really ought to be looking up the Council of Mortgage Lenders' handbook replies from the lenders on this point. Most of the big ones e.g. Santander, Halifax, do not even want to be told about the result os Environmental Swearches unless the Council has decided to serve a remediation notice (which is a very rare thing indeed.)

There will be some who will be concerned but frankly the present lender's attitude is not really the issue in most cases.

Most of the time there isn't actually a problem - its just that nobody can be sure and so they can't prove there isn't any contamination, hence the benefit of a policy which may allay concerns on your part or that of a future buyer. The seller should pay for this - they only last 10-15 years generally so you may have to take out another one when you sell and the buyer wants longer cover.

Of course lenders could change their attitude on the point and you could be stuck.

And, worse case scenario - that might actually be some contamination that nobody has yet discovered.. If the contamination is pretty localised in a garden area and nobody has grown vegetables in the area and then eaten them and fallen prey to some dreadful lurgy, it isn't that likely anyone would find out....

Generally we would assess the risks in this sort of case as small - BUT they can never be completely discounted....

Cleverclogs

Apologies as I don't have any advice but just to say we are in exactly the same position as you. We are still awaiting our LA search report but our environmental search has raised a 'high potential risk of contaminated land'. Like you, it's on a 1990s built estate, and the risk is down to POSSIBLE industrial use in the 1960s. Our solicitor has raised enquiries with the vendor's solicitor to see if they can shed any light on it, and we have discussed contacting the LA for a report (which will take up to 2 weeks delaying things further), or taking out an indemnity policy. We will be asking the seller to pay for it, as even if we pull out, it's likely any potential buyer will come up against the same issue. My understanding is that our solicitor has informed our lender (Nationwide) and isn't anticipating any issues with our mortgage offer but we are also a bit anxious!

elsien

My house is on potentially contaminated land from an old battery factory and I've never had a problem with mortgages. Before I bought I discussed it with the planning dept who said if there were any issues they were looking on it as " the polluter pays".
The only other advice they gave was to not grow food directly into the ground, as a precaution. It's now 14 years on, the site was cleaned up and built over with housing, and the council is now digging odd holes in people's gardens up and down the street to see if they can reassess and allow us to grow our potatoes after all! It's never affected any sales or mortgages as far as I am aware, and certainly not a problem for me- my first mortgage was with nationwide.
Purely anecdotal, but just to show you it can be fine.