Surveying Services
Flooding
implications for residential surveyors
Paul Cutbill FRICS and
Ray Simmonds FRICS, Quality Manager,
Countrywide Surveyors
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RPSA April 14
Surveying Services
Flooding and flood risk
There is greater recognition amongst the public , the insurance
industry, and the surveying sector of the potentially catastrophic
effects which flooding can have on residential property.
• Dramatic news coverage and increased frequency of flooding
have heightened awareness of the problem particularly with
the home buying public.
• Underlines the fact that the risk
of flooding is more widespread
than previously assumed.
Are surveying practitioners sufficiently aware?
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RPSA April 14
Surveying Services
The problem for surveyors and valuers
How should surveyors assess the flood risk applicable to a
residential property from the snapshot taken at the date of an
inspection?
How should we obtain the information, evaluate it and advise
the homeowner, prospective purchaser and/or lender if acting as
a valuer?
Certainly the case that flooding warrants greater consideration
by surveyors in the future.
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RPSA April 14
Surveying Services
Suggested industry approach
1.
2.
3.
Assessment of the risk requires consideration of the physical
attributes of the particular property.
An understanding of its proximity to potential flood sources
The frequency and depth of that potential flooding.
All of the above in addition to other survey inspection
requirements and tasks to be completed.
Also needs to be set against existing survey and valuation terms
and conditions of engagement.
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RPSA April 14
Surveying Services
Types of flooding – historical awareness
Tidal - Both sea and river defences may be overtopped or
breached by a combination of low pressure weather systems and
peak high tides.
Fluvial - Flooding 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.
Ground Water - Low lying areas sitting over aquifers may
periodically flood as ground water levels rise.
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RPSA April 14
Surveying Services
Types of flooding – increasingly a problem
Flooding from sewers - Flooding from sewers can occur where
there are combined storm and foul sewers and their capacity is
exceeded due to large amounts of surface water run-off in a
short time.
Pluvial - Surface water flooding is caused by rainwater run-off
from urban and rural land with low absorbency.
Flooding from man-made infrastructure - Canals,
reservoirs, dams and other man-made structures
can fail causing flooding to areas downstream.
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RPSA April 14
Surveying Services
Pluvial flooding – a new challenge
Surface water flooding is caused by rainwater run-off from urban
and rural land with low absorbency.
• Pluvial flooding now associated with over half the flooding in
an average year in the UK.
• Therefore should be a matter of increasing focus for
residential surveyor practitioners
• Until relatively recently it was impossible to access data that
would predict where surface water might collect including
how often and to what depth.
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RPSA April 14
Surveying Services
Insurability
It has always been important to the Government to ensure that
insurance against flood risk is available to most residential
properties .
• A need to fund repairs and to ensure mortgageability.
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RPSA April 14
Surveying Services
Statement of Principles
In place since 2000, between the ABI and the Government.
•
•
Secured the availability, from ABI members, of renewed flood
insurance for most homes, so long as the Government
managed flood risk effectively.
In practice, the premiums for properties affected by flood risk
have been subsidised by premiums for those not at risk.
Excluded - properties built in 2009 or later.
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RPSA April 14
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Flood RE
On 27th June 2013, the ABI and the Government agreed a
Memorandum of Understanding outlining proposals for a new
model to secure wide availability of flood insurance for
residential property at an affordable cost.
•
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The Government recommended a not-for-profit mutual
scheme which would last 20 years, called Flood RE.
RPSA April 14
Surveying Services
Flood RE
Flood RE will be run and financed by insurers as a not-for-profit
fund which will offer flood cover for high risk homes.
Insurers will pass the flood risk element from those
households deemed at high risk of flooding to the fund.
• Premiums for this cover will be calculated based on council
tax banding, with a maximum ceiling depending on that band.
•
Equates to a levy of £10.50 on annual household premiums and
represents the estimated level of cross-subsidy that already
exists between lower and higher flood risk premiums.
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RPSA April 14
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Flood RE excluded properties
Flood RE will not cover:
Homes built since 2009
• Commercial or mixed use properties
• Homes in Council Tax Band H
• Losses beyond the 1 in 200 year mark. There is no
guarantee that the Government will make resources
available to cover such losses
• Genuinely uninsurable properties for other reasons
•
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RPSA April 14
Surveying Services
Role of the surveyor and valuer
The role of the valuer/surveyor is to assess the impact of
flooding risk in accordance with existing standards, ensuring that
client requirements are set out clearly in the Terms of
Engagement.
Q - Are current T&C’s reflective of customer needs and
expectations on flood risk?
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RPSA April 14
Surveying Services
Existing survey standards
The surveyor needs to be familiar with the nature and
complexity of the property type and the region in which it is
situated. This is likely to include general environmental issues
where information is freely available to the public, including
information on flooding.
•
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Pre-inspection research should be undertaken relevant to the
survey advice and reference should be made to the specific
product practice notes
RPSA April 14
Surveying Services
Valuation standards
Property professionals who are members of the RICS and
Registered Valuers are required to carry out their valuations in
accordance with The RICS Valuation – Professional Standards
2014 (Red Book).
•
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VPS 2 states that “inspections and investigations must always
be carried out to the extent necessary to produce a valuation
that is professionally adequate for its purpose.”
RPSA April 14
Surveying Services
Assessing flood risk – survey methodology
1.
Consider flood risk as part of physical inspection
2.
Review history and known issues
3.
Consider occupier impact of any flooding or flood risk
4.
Assess likely impact on value
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RPSA April 14
Surveying Services
Considering the risk of flooding in locality
Features of the property and site:
• “Follow the trail” principle to be applied.
• Expertise, experience and local knowledge.
Pre flight checks – an important aspect of the survey
• know what you will be looking at and where.
Keeping up to date with technology and policy eg Flood RE.
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RPSA April 14
Surveying Services
Flood history of property/locality
Established sources of readily available data:
• Environment Agency , Private sector, insurance companies,
local knowledge, internet searching, local paper and
community information
• Role of the Conveyancer – Law Society practice note updated
May 2013. Vendors information form TA6 includes questions
on flooding history
Future sources:
• Lead Local Flood Authorities - ability to request information
• Role of data gatherers eg Rightmove, Landmark Quest?
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RPSA April 14
Surveying Services
Impact of flooding on occupation
For residential property the scale of flood events will vary.
• A cellar may occasionally fill with water to a few cm, have no
impact on occupation of the property and as long as
occupants are aware to store items at high levels be
acceptable for occupation.
•
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There are increasingly sophisticated measures
and this is an area where specialist advice
may need consideration and
Recommendations sought.
RPSA April 14
Surveying Services
Potential risk impact on value
•
Where there is a risk of flooding and / or a perceived risk to
an individual property there is likely to be an impact on value.
•
However, this may not be translated into the market in a
proportionate way eg coast or river view may be considered
worth the risk.
•
Caution should be exercised by surveyor if the agreed sale of
a given property indicates that the purchaser may not have a
full appreciation of the flood risk profile of the property.
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Surveying Services
Questions?
RPSA April 14