Contaminated Land

The Environmental Protection Act 1990 introduced a statutory contaminated land regime in the UK. This means that local authorities (LAs) have to review land in their area that they think might be contaminated, and make a record of any areas that they find to be contaminated together with an action plan for remediation.

Lenders will ask conveyancers to search the LA to see if there are any contaminated land records. The searches that lenders require from conveyancers are set out in the Lenders' Handbook. Part 1 of the Handbook contains the general requirements of all lenders. Lenders also may have individual requirements that are set out in Part 2 of the Handbook. 

Lenders require the conveyancer to report any contaminated land entries recorded by the local authority.  A number of conveyancers regularly obtain environmental search reports for their clients. Lenders do not have a general requirement for conveyancers to get environmental search reports, and we have no plans to change this. In practice, environmental reports are unlikely to help lenders with their decision to lend without specialist advice. This is because: 

• The reports do not contain enough information on which to make a judgement about current or future risk.
  
• Even if the reports are property specific, there are no details of actual contamination or risks from contamination, what might be needed to remediate the site or any indication of the effect on valuation.
  
• The number of properties affected by contamination is likely to be small, possibly less than 5%. Even if contamination is identified, this is not necessarily a barrier to lending.

Some lenders are prepared to consider environmental reports, and these will be set out in their Part 2. However, the majority of lenders do not want to see them routinely. Even where lenders do consider them, they will do so alongside any other information available to them.