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Did you know subsidence is the most costly ground hazard in the UK? Around 64 million pounds of subsidence claims were made in the last year – and it’s only going to get worse as climate change wreaks havoc in the hotter and drier summers ahead, yet the full extent of the risk isn’t widely understood.

That’s why, as part of our tm:tv series on climate change, in partnership with Terrafirma, Dr Tim Farewell – one of the UKs leading academics on geohazards and the interaction between the natural and built environment – shared the top 5 questions every legal professional and homeowner should ask to better understand the future of subsidence.  

1. Can the soil shrink as it dries?

Soil is complex, but one of the key questions we need to ask is “can it shrink?”. This is because the expansion and contraction of the soil, as it gets wet and dries out again, creates movement and inevitably damages brickwork. 

It’s not the only soil factor to consider – as sandy soil types can also cause problems (for example, a consistent dripping of water can lead to the formation of a hole beneath the property) – but, by mapping which parts of the UK have a prevalence of shrinkable soil types, it’s possible to build an accurate picture of the properties most likely to be affected by subsidence as the climate changes. 

2. How’s the weather? 

Brits love to talk about the weather! However, it’s more than just small talk when it comes to subsidence risks, as in areas with a prevalence of shrinkable soils, the increasing shift towards hotter and drier summers – brought on by climate change – is a big problem.

This is expected to cause the most disruption in the next 20 years, as the depth the soil will dry out to will increasingly align with the 2-metre depth of foundations. 

3. Are there trees nearby?

Trees are another risk factor in areas with a prevalence of shrinkable soil. 

Whilst nearby trees are unlikely to directly cause subsidence issues, their presence can accelerate damage by sucking additional moisture out of the soil and contributing the depth the soil dries out to. 

4. When was the house built? Is there an extension? 

Certain types of construction also make properties more vulnerable to subsidence. For example, older houses tend to have quite shallow foundations, whilst newer ones are regulated to be substantially deeper.  

This may not cause too much of problem for properties kept in their original condition, but the addition of a new extension could complicate things; as differing foundation depths could result in one part of the house moving more than the other, leading to cracking between the original house and the extension. 

5. Are you looking backwards AND forwards in time?

Typically, conveyancers look at historical data (such a coal mining sites and areas of contaminated land) to understand the ground and perform their due diligence against their clients’ intended purchases. 

However, as the climate changes, and the ground also changes in response, the industry needs to be increasingly looking forwards and modelling against the anticipated impact of subsidence, if we are to take a more consistent approach in advising clients on the risks of climate change, and the likelihood of them needing to make a subsidence claim in future. 

It’s not just about modelling either, it’s about taking steps to future proof against the anticipated risk. For example, moving towards a point where developers are building New Build properties with “green” foundations and less concrete to help mitigate the risk of subsidence in the longer term. 

Do you want to know more? Take a look at the subsidence session on tm:tv here.

As part of a tm:tv series on climate change, in partnership with Terrafirma, the ‘Mining our way to a greener future’ episode brought together an expert panel to discuss how the property industry need to start making changes today, to prepare for the sustainability challenges of tomorrow. 

Hosted by Martin Manning, Head of Account Management at tmgroup, the panel included:

• Kate Charrington, Chartered Residential Surveyor & Valuer

• Megan Jenkins, Professional Support Lawyer - Real Estate, Shakespeare Martineau

• Tom Backhouse, Geologist and CEO of Terrafirma

Whilst it was immediately clear this is a complex issue, with no magic wand, there are many changes the industry can collectively make to move things in the right direction. 

Here are just some of the suggestions…

#1: More lender guidance and data to help make informed decisions 

The property industry is currently lacking the clear guidance it needs for professionals to advise consistently on sustainability matters, as Martin Manning commented: “Right now, so much comes down to the best judgement of the surveyor and solicitor involved in the transaction. We simply don’t have the steer from the likes of RICS, The Bank of England, The Law Society, and so on, of what exactly needs to be looked at across the breadth of the transaction.”

This current lack of direction creates challenges, as Kate Charrington commented: “To complete a survey or valuation, surveyors look at lots of different things, including capital value and who the average market participant is, but they won’t look at sustainability issues, as there’s simply not enough data or lender guidance out there to help them make informed decisions. Moving forward, we need to be integrating more systems to see what the flood, green, and radon risks are (and more!). As it currently stands, the industry doesn’t have enough insight to make valuations based on sustainability matters, and therefore homeowners don’t see the value either.”

Solicitors are in the same boat, as Megan Jenkins commented: “Like surveyors, solicitors also rely on guidance from lenders and governing bodies to manage the risk of the transaction, and so if the lender hasn’t yet taken onboard the impact of sustainability on property value, this isn’t going to be feeding into conveyancing practices. Energy Performance Certificates (EPCs) are a great example of this, as we’ve had them available on every property since 2008, but not needed to report on them. However, there’s now a call for lenders to report on EPCs, and while it’s only in the consultation period, it’s clear to see how factoring poor EPC ratings into lending risk assessments could help to reshape the conversation on sustainability and give solicitors and surveyors some much-needed guidance.” 

#2: Homebuyers need to be investing in sustainability measures in the same way as they currently think about adding an extension or downstairs toilet 

All homeowners know that if they want to increase the value of their property, they can look at making home improvements such as adding an extension, new driveway or downstairs toilet, but this narrative needs to change, as Martin Manning said: “I think we need to see more drive both from lenders and the media to make it clear to homeowners that they should expect a return on investment with sustainability measures too. We also need to start talking about how properties will be LESS valuable in the future without a ground source heat pump (for example), as changing the language we use can be very powerful.”

Such messages could be reinforced by the introduction of new incentive schemes or taxation measures, pushing the general public to make greener choices (similar to what we’ve seen more recently with car taxation). However, more needs to be done to make sure such schemes actually make a difference, as Kate Charrington added: “We regularly see new incentives pop up in the market, but they often don’t have the desired impact – especially in cases where the maths just doesn’t add up. When you only have a £5k grant for a £15k ground heating pump, it’s not surprising many homeowners choose to spend their money elsewhere.” 

Such negative experiences create additional barriers in moving towards a more sustainable future as well, as people are less likely to take up new initiatives if they’ve been “burnt” before – particularly when you think of the less scrupulous businesses that benefitted from the rollout of solar panels in recent years. 

#3: Everyone needs to better understand the implications of increased mining activity in the UK 

The mining of additional minerals in the UK is really important for the long term sustainability of our shores, but more education is needed to help homeowners and property professionals alike better understand this, as Tom Backhouse commented: “The challenge we have with mining is that living memory is all coal-related mining, as it was a massive industry and supported livelihoods across the UK. But this conversation needs to change. As we move towards a future of electric vehicles, more copper and critical minerals need to be extracted from the earth than have ever been mined in human history. Whilst a lot of this activity is taking place offshore, there’s a renewed interest in mining across the UK (for example, looking at mining parts of Cornwall for tin and lithium) in order to make us more resilient in mining commodities and meet the needs we will have in developing electric vehicles and solar farms, etc… We’re at a point where we should be reconsidering our day-to-day work processes within the scope of the property transaction to help the country prepare for a greener future, as well as better understand the impact increased mining activity will have on the value of nearby properties.”

…And that’s just the tip of the iceberg! Watch the full ‘Mining our way to a greener future’ tm:tv session for more on how the property industry can become sustainable. 

In a recent tm:tv session, tmgroup’s CEO Joe Pepper explored how and why the residential property market continues to be a money laundering target. Joined by Simon Wilkinson, Board Member of Propertymark (NAEA), Olly Thornton-Berry, Co-Founder & MD of Thirdfort Limited, James Liffen, Partner and Head of Mishcon de Reya's Residential Property team, and Andrew Kimpton, Mortgage & Protection Adviser, Just Mortgages, the panel discussed how issues surrounding inconsistency, lack of regulation, and reliance on paper-based processes need to be addressed to help the industry move forward. You can watch the full session here.

£4.5 billion is laundered through residential property every year

Money laundering continues to be a huge challenge, with £4.5 billion of “dirty money” estimated to have gone through the residential property last year, and some believing the actual figure is closer to £30 billion. Why is this such a problem? Looking at the bigger picture, money laundering activity typically passes funds to terrorist groups, drug dealers, and other unsavoury characters. Yet there are also terrifying, direct consequences for property professionals too, with jail time and unlimited fines at stake for those (even unintentionally) finding themselves involved in such activity. 

However, we’re beginning to see changes for the better, as Simon Wilkinson, Owner of the Wilkinson Partnership and Board Member of Propertymark (NAEA) comments:

“Beyond the introduction of the 5th and 6th AML Directives, heavy fines and high profile cases have come into play. HMRC have also been doing more audits over the last few years, so property professionals are taking AML practices far more seriously. Unfortunately, we’re still seeing a handful of ‘rogue’ agents not following proper practices and leaving themselves open to sanctions, which will be a question of when they get prosecuted – not if.”

Manual processes leave gaping holes for criminals to take advantage of 

Why is residential property so attractive to money launderers? Quite simply, it enables a quick and easy way to “clean” hundreds of thousands of pounds in a single transaction. Coupled with many law firms, estate agents, and mortgage brokers still using older, manual methods to complete AML due diligence, this provides huge motivation for criminals to develop new and increasingly sophisticated methods to outsmart “the human eye”. 

In a world where fake bank statements, ID documents and utility bills can be bought online for as little as £5, the industry needs to take a long hard look at how it is practicing AML due diligence, as Simon Wilkinson, Board Member of Propertymark (NAEA) continues:

“Part of the problem is the lack of regulation across the industry resulting in poor practices being rife. This is evident in the latest research from the SLC and SRA as, at the end of last year, a series of random surveys from the SLC found that two-thirds of firms were non-compliant with their AML rules, whilst the SRA found that 65% were just using a boilerplate template for their AML due diligence.” 

Artificial Intelligence and facial recognition technology can help detect fraud

Fortunately, innovative technology providers are rising to the challenge and solutions are now available that use Artificial Intelligence, facial recognition technology, and more, to verify identity documents and source of funds – saving time and reducing risk, as Olly Thornton-Berry, Co-Founder & MD of Thirdfort Limited comments:

“It’s very easy for a fraudster to change an ID to a new address to outsmart a simple database check. However, when this is layered with Artificial Intelligence that can detect whether a document is real or fake, and facial recognition technology to prove that an individual is who they say they are, it suddenly becomes a lot harder for criminals to succeed.”

The pandemic-led surge in remote-working practices has helped to boost the adoption rates of technology-led AML checks too, as James Liffen, Partner and Head of Mishcon de Reya's Residential Property team comments:

“Since lockdown began, we’ve had to bring in practices we didn’t even think were available, such as companies doing online verification checks for us. While we were always very thorough and comfortable we were doing a good job, digital solutions now offer us that extra layer of protection. It’s proved a fantastic opportunity to see how technology will be vital moving forward. Even when we go back to the office, we’ll be using it.” 

Digital collaboration will be key to stamping out money laundering

Moving forward, it’s clear the time has come for property professionals to “go digital” in order to better protect their businesses and their clients from money laundering activity, and put a stop on the billions of pounds of “dirty money” flowing through the residential property market each year. As consumers become increasingly tech-savvy, it’s equally important that the industry moves away from the manual time-consuming processes and duplication of effort we are currently seeing. 

The industry also needs to consider practical solutions as to how multiple providers can all work together to deliver a joined up, time-saving and secure solution to everyone involved, as Andrew Kimpton, Mortgage & Protection Adviser, Just Mortgages comments: 

“As more solutions come to market, I think we’ll need to adopt a system similar to how we all currently work with credit reference agencies, allowing various property professionals to work with their choice of provider, but still receive the same information.” 

Individual providers also need to consider how they communicate and collaborate with industry partners to enable this, as Joe Pepper, CEO at tmgroup comments: 

“Collaboration across the industry is key to success and building solutions with open APIs will help to facilitate this, so we are increasingly able to join solutions together to not only make things better for property professionals and consumers, but make it harder for criminals to succeed.”

Want to find out more? Watch the full “Dirty Money in the Property Market” tm:tv session here.

At a recent tm:tv session, a panel of property professionals shared their views on the challenges facing the continuing survival of the new build market during the global pandemic.

Private housing sector was one of the worst affected sectors

The property market has faced many hurdles recently, Brexit created a lot of uncertainty within the market stalling new development projects. January 2020 then saw a positive uplift within the New Build market, but as projects began to get back on track COVID-19 hit.

“Private housing sector was one of the worst affected sectors due to temporary closure of sites, with lockdown restrictions being lifted reopening of sites have been slow as developers had to ensure man power was reduced to adhere to the new social distancing measures that were put in place.” Commented Allan Willan Economic Director, Glenigans.

The current state of the market should not be taken for granted but instead seen as a rebound, transactions bounced back in Q3 and mortgage approvals up on this time last year, driven by short term concern of extended lockdown and wanting green space to hand. However, longer term, we’re going to see trends in lifestyle changes post-covid. Fewer and longer commutes really going to reshape the property market and change the face of commuter towns. All of this in short term will feed into price inflation. This will also likely be affected by general weakening in the housing market forecast in 2021 due to rise in unemployment and weakened economic growth as well as the temporary withdrawal of the stamp duty relaxation.

Lack of affordable homes is a major challenge for New Developments

The Government whitepaper outlined its views on changes to the planning system, however there is currently still a push against developments due to lack of affordable homes coming forward.

This is a big problem that needs to be addressed.

“I think the fixing of this issue is going to come through mainly housing associations delivering these developments rather than the private sector.” said Dominic Woodward, Tri Core Developments.

The whitepaper is set to announce removing affordable provisions from private development for sub 40-50 dwellings. This would then fall on the Housing Associations to provide this housing. From a commercial perspective, this change would benefit smaller developments in terms of return on investment, as sometimes it is not commercially viable for smaller sites to provide this type of housing.

“The bigger picture is that we are trying to unlock the delivery of large plots of land for various developments across all of the tenures with a wider range of deliverers rather than having a few large housebuilders” commented Lord Taylor of Goss Moor.

What will make the new build market a success?

“Real success comes from balancing the number of houses with the quality of houses without the adverse environmental impact.

Success is still waiting for us in the future. We cannot say we have achieved success in the past few years. If there had been success then we wouldn’t have a comprehensive White Paper aiming to rewrite the planning system” Tim Taylor, Foot Anstey.

Click here to watch the full session

Residential property professionals across the breadth of the chain are feeling the pressure of increased volumes brought on by the Stamp Duty holiday. Yet, according to the latest tm:tv panel debate ‘Is the property market faking it?’, buyers and sellers could help reduce the pressure by taking proactive steps to manage their transaction. Hosted by Emma Vigus, Managing Director of mio, this sentiment was echoed throughout the tm:tv session by estate agent, conveyancing, surveying and mortgage broker representatives. 

You can watch the full session here:

The market is moving again, but the biggest challenge is getting sales to completion

Compared to 6 months ago, when the panel first met, the market is in a far better place. The general public have adjusted to social-distancing restrictions and are more confident about allowing surveyors and estate agents into their homes (some are even starting to request face-to-face meetings), and, encouraged by the Stamp Duty holiday, people are moving again.  

The biggest challenge is in getting sales to completion. 

The industry is busier than ever. Even ‘The Big 6’ lenders are struggling under the weight of mortgage applications, with some receiving approximately 1,500 applications a day, but only being able to process 500 – resulting in a backlog and delays. 

This is exacerbated by how much more complex and time-consuming the process has become, as Greg Cunnington, Director of Lender Relationships and New Homes at Alexander Hall commented: “It’s really different! Mortgages were more straightforward before lockdown and, thanks to technology and prompt surveyor inspections, getting a mortgage offer in 5-10 days was quite normal. However, it now takes 12-18 days just for buyers to get an initial assessment with some lenders, and if there’s any hiccups along the way, it only adds to the delay. Lenders are also doing more manual assessments to counteract the increased risk of lending to people who are self-employed and currently on furlough, so that’s also adding to the delays.”

It’s not just the mortgage application process that’s taking extra time. Other key players in the market are feeling the strain too, as Joe Arnold, Owner, Arnold & Baldwin Chartered Surveyors said: “We’re experiencing capacity issues with managing this new, heavy workload. We’ve brought everyone back from furlough and it’s still not quite enough, but we’re reluctant to take on new people as we just don’t know what’s around the corner. Unfortunately, it’s created a backlog of work, as where we only used to require 2-3 days’ notice to go out and do a mortgage valuation or survey, there’s now a 3 week wait.” 

Being proactive and managing expectations is key to keeping things moving 

Unfortunately, the majority of buyers are unaware of just how much the home-moving process has changed behind the scenes, and so the onus is on property professionals themselves to help their clients better understand where they could be more proactive – for the benefit of all involved. 

• Mortgage applications need to be qualified asap: “Buyers should have a Mortgage Decision in Principle before they view any properties.” – Greg Cunnington, Director of Lender Relationships and New Homes at Alexander Hall.

• Pre-empt delays and reassure clients as much as you can: “It can really help to pre-empt what could go wrong and cause delays and have that conversation with buyers upfront, so if and when things do go a bit slower, at least it’s expected and a bonus if it actually comes in that bit quicker. Estate agents also need to step up with their communications to help reassure buyers that things are moving forward.” – Perry Power, Manging Director, Power Bespoke.

• Clients need their professional team in place from ‘Day 1’: “Homebuyers need to get their professional team alongside them as soon as possible – including their mortgage broker and surveyor.” – Joe Arnold, Owner, Arnold & Baldwin Chartered Surveyors.

• Buyers need to be completing their AML checks before even looking at properties: “Buyers should be instructing their conveyancers before they start looking at properties, as AML and title checks take time, and can cause delays later on. Unfortunately, we often find buyers are reluctant to spend the money up front, when the truth is that in the grand scheme of things, it really isn’t that much, and would relieve a lot of the pressure on conveyancers and the property transaction as a whole.” – Yanthe Richardson, Senior Associate, Foot Anstey.

It’s an understatement to say that the industry is continuing to face unprecedented challenges as we approach the end of 2020, but proactivity, communication and collaboration will be key to keeping things moving. Are you playing your part in keeping property transactions moving?

To view the session in full click here

A recent tm:tv session has highlighted that the property industry still has a long way to go before it can be considered truly diverse. Hosted by mio’s Emma Vigus, the panel representing estate agents, surveyors and conveyancers shared their experiences of how the industry is failing to offer opportunities to ethnic minorities, as well as those identifying as disabled or members of the LBGTQ+ community. 

One of the biggest cultural challenges in property is around “does your face fit?”, as Elliott Purcell explains, “When I was passed over for a promotion I wholeheartedly deserved, one of the biggest learnings for me was the prevalence of the “does your face fit?” culture. I hadn’t even thought about it before, but when I looked around I realised that black inclusion at a higher level is very minimal. I’ve worked for 3 large corporate estate agents over the years, and never once seen someone above Area Manager that has been of an ethnic background. It’s tough. As a black person, I feel I have to be exceptional to even be classed in the same category as others.”

It isn’t just about the colour of your skin, as Kate Charrington says, “As a people-facing industry, there are strong stereotypes about what you should look like to the general public. In the past, I’ve even been asked to ‘wear a bit of lippy’ by a senior manager. I don't think anyone needs to conform to this in 2020, but it really stuck with me. These stereotypes are even perpetuated by our customers, including a young women who once answered the door and said ‘oh, I was expecting a surveyor, an older guy’.” 

These barriers aren’t just about missing out on promotion opportunities either, as Sharon Singer confirms, “Over the years, I’ve been excluded from several social events. When you miss out on these, you inevitably also lose the opportunity to grow your professional network, which is equally vital in building a successful career.”

You can watch the full session here:

Lack of management training across senior property professionals only exacerbates the issue

A lack of formal management training across the industry is cited as one of the key reasons behind this feeling of exclusion, as people promoted for their technical expertise often don’t have the necessary experience to understand and support the needs of a diverse team. This can have a knock-on effect on everything from how safe an individual feels about being open about their sexuality, to whether or not an individual is fairly considered for a promotion. 

As Sharon Singer says, “We need to be training up our managers with the necessary inclusive management leadership skills, and also making sure people who are promoted to managers are considered for their people skills, as well as their technical ability. Some people are just not people managers, and this creates challenges within the teams they manage.”

When people speak out and share their experiences it helps others feel safer too

Despite the bleak picture, the outlook is considerably brighter. Minorities across the industry are already speaking out about their experiences on public platforms such as LinkedIn, which is making a positive difference in creating safer, more inclusive working environments where people feel free to be themselves. 

As Joe Ellison confirms, “Being a gay man working in surveying, I found I didn’t want to talk to my colleagues about my private life for fear of damaging my professional reputation. However, I got fed up with people assuming I was straight and recently came out on LinkedIn to help set the record straight, and it’s made things a lot better.” 

And every voice counts, as Sharon Singer supports, “A lot of people stay quiet about their sexuality out of fear of what could happen, as sadly there are examples of horrible people online and in the workplace. However, the more that people that come out and are celebrated, the more it becomes the norm. It’s a very hard thing to do to come out on LinkedIn, but it does help other people in same position.”

It’s not enough to simply add a rainbow to your company logo – you have to live and breathe it

Despite this sense of progress however, there is still some confusion about what diversity looks and feels like on a day-to-day basis, as Sharon Singer continues, “People are going to pride marches or putting a rainbow on their logo and thinking it’s ‘job done’, but it’s not enough. Supporting true diversity needs to be part of a wider strategy linked to business objectives in order to be successful. The challenge is to encourage senior leaders to be having these conversations with the board.” 

As such measures can take a while to permeate, particularly in larger organisations, it’s equally important that leaders are educated on matters of diversity and disability, so they can be more accessible to their team members in need of additional support, as Martin Whitehorn explains, “Simply taking an interest and making reasonable adjustments can make a big difference to someone’s life, as well as improve accessibility to opportunities within the profession.”

It’s very encouraging to see that steps are already being taken to highlight the needs of people with disabilities in the workplace. For example, the ‘Legally Disabled’ survey has recently been published, exploring the career experiences of disabled people working in the legal profession, and exposing how the industry norms of billable hours, targets, and presenteeism are not conducive to inclusivity. 

As Martin Whitehorn continues, “People with disabilities are routinely getting overlooked for promotion as, for a multitude of reasons, they sometimes physically aren't able to put in as many hours of chargeable time as their colleagues. There needs to be a renewed focus. As with mothers returning to the workplace, there needs to be an emphasis on the quality of the work you put in – not the time you put in.”

Overall, as the tm:tv session came to a close, it was clear that there are positive changes afoot, however property professionals must do more to address diversity issues in the workplace, as Emma Vigus concludes, “As with any kind of change, we have to live and breathe it. It has to be embedded in every way a business works. It’s a very difficult thing to do, but it’s the only way to make a real and permanent change.”

To view the session in full please click here