1. 1 GroundSure: Environmental Searches 1 Flooding and the Implications to Home Buyers David Kempster Flooding and the Implications to Home Buyers David Kempster

2. 2 Agenda Legislation and Guidance Facts, Figures and the reality in the UK Due Diligence Data Case Studies and Opinion GroundSure: Environmental Searches 2

3. 3 Current Legislation/Guidance 3  Flood and Water Management Act 2010  Statement of Principles extended to 2015  Law Society Practice Note on Flood Risk  National Policy Planning Framework  Pitt Review 2007

4. 4 Flood – The Facts 4 2.4 million at risk of River or Coastal Flooding alone 2.8 million at risk of Surface Water Flooding alone 1 million at risk of both types

5. 5 Flood - Facts and Figures 5  5 million people live and work in flood risk areas  55% of water treatment plants at risk  14% of electricity infrastructure at risk  2,358 schools at risk  £7 billion has been paid out since 2000  The effects of flooding and managing flood risk are costing around £2.5 billion each year.

6. 6 2013/4 – A UK Perspective 6 Winter 2013/14 – Wettest winter in the long running England and Wales Precipitation series from 1766. Rainfall total is 532 mm, which is 161% of the 1981-2010 average. 1 £1.1bn worth of insurance claims (and still rising) 6000+ properties flooded 4 deceased

7. 7 Due Diligence Law Society Practice Note on Flood Risk Negligence Claims TA6 – has any part of the property ever been flooded? – this will not provide a sufficient answer of the risk of flooding Pitt Review “flood risk should be made part of the mandatory search requirements when people buy property.” (Recommendation 63) Flood Searches 7

8. 8 Due Diligence – Insurers and Lenders Residential Property – Council of Mortgage Lenders “It is a standard condition of all mortgages for the property to be covered by standard buildings insurance, including flood cover. If insurance is not available, then it is unlikely that a property will be mortgageable.” GroundSure: Environmental Searches 8

9. 9 In the News 9. Householders braced for more flooding as 80mph winds sweep in. People across southern England are bracing themselves for more flood misery with forecasters predicting that heavy rain and winds of up to 80mph will sweep across the country later. Lethal storm and tidal surge sees thousands out of homes. Thousands of people have had to evacuate threir homes as a severe storm batters large parts of the UK. England’s east coast is experiencing the worst tidal surge in 60 years. Half-million homes at risk are not covered by flood scheme. Almost half the homes deemed at serious risk from flooding will not be covered under the government's new flood insurance scheme because officials have decided to omit the future impact of climate change.

10. 10 GroundSure Flood Data 10 Environment Agency Flood Zones NaFRA Flood Defences Flood Storage Areas Historic Flood Events Watertight Flood Protection Measures  JBA – Surface Water (Pluvial) Flooding – Reservoir Failure – Insurability Index  British Geological Survey – Groundwater Susceptibility & Confidence Areas

11. 11

12. 12 The Data 12 JBA Pluvial DataEA NaFRA Data

13. 13 Case Study –Residential Flood

14. 14 Extract from Environment Agency flood map CASE STUDY Residential Flood Green Lane Gardens

15. 15 Extract from JBA flooding CASE STUDY Residential Flood Green Lane Gardens

16. 16 CASE STUDY Residential Flood Surface Water 16 Highly Significant - depth of flooding greater than 1m in a 1 in 75 year rainfall event Significant - depth of flooding 0.3m to 1m in a 1 in 75 year rainfall event High - depth of flooding 0.1m to 0.3m in a 1 in 75 year rainfall event Moderate to High - depth of flooding greater than 1m in a 1 in 200 year rainfall event Moderate - depth of flooding 0.3m to 1m in a 1 in 200 year rainfall event Low to Moderate - depth of flooding 0.1m to 0.3m in a 1 in 200 year rainfall event Low - depth of flooding greater than 0.1m 1 in 1000 year rainfall event

17. 17 28 th June “Thunder Thursday” hit the north of England 1500 lightening strikes in 1 hour 50,000 homes lost power Storm lasted 2 hours 2 ft. of water & sewage burst through the floorboards Over a months rainfall in two hours 30 properties affected No electricity or heating for over 2 weeks 9 months on residents are still cleaning up their streets 17 CASE STUDY Residential Flood Green Lane Gardens

18. 18 CASE STUDY Residential Flood Green Lane Gardens 18

19. 19 CASE STUDY The aftermath 19

20. 20 CASE STUDY Thunder Thursday 20

21. 21 Effect of property value Structural damage Contamination Reduced value Lender reaction – lower loan to value ration, search precondition, retention until flood protection measures are in place GroundSure: Environmental Searches 21

22. 22 Expert Opinion.MAP - Essential digital mapping delivered with high value site intelligence embedded in client workflow

23. 23 The Future – Flood Re The cap will be based on Council Tax bands: The capped premiums will go into the fund to help pay for flood claims Eligible Properties: Insured in the name of individuals, council tax band, residential, individual premium, occupied by owner or immediate family GroundSure: Environmental Searches 23 Council Tax band ABCDEFG Buildings only – net £132 £148£168£199£260£334 Contents only – net £78 £98£108£131£148£206 Combined - net £210 £246£276£330£408£540

24. 24 The Future – Flood Re Flood Re claims funded by premiums and industry-wide levy on UK domestic properties The claims system will likely need to accommodate up to 100k properties at any one time Flood Re will cover losses up to a 1 in 200 year flood Standard £250 reinsurance excess on Flood Re homes Should an extreme flood occur before the fund builds up, and claims outstrip the available fund, the Government will step in to support distributing available funds to affected households GroundSure: Environmental Searches 24

25. 25 Exclusions Properties in Council Tax band H (I in Wales) – Government are now reviewing this exclusion Properties built after January 2009 Any size commercial property: Businesses Bed and Breakfasts Farms Leasehold Properties Residential Landlords GroundSure: Environmental Searches 25

26. 26 Flood Re The Flood Re levy will be classified as a tax Flood claims for Flood Re homes will be handled and funded by insurers, who will then recoup the cost from Flood Re Flood Re will have no direct interaction with customers Levy will build up £180m fund, based on handling 1: 200 annual aggregate loss Reinsurance limit set at 1: 200 annual aggregate loss Government will not formally step in if exceeded, but take ‘primary responsibility’ for allocating any available resources GroundSure: Environmental Searches 26

27. 27 What to do next Obtain flood insurance GroundSure manual flood risk assessment Discuss your requirements with Watertight Flood protection measures GroundSure: Environmental Searches 27

28. 28 Resistant and Resilient Measures 28 1.Pipes & Cables 2. Air Brick Covers 4. Walls must be in good order. 3. Air Brick Replacement 7. Basements & Cellars 5. Door Barriers 8. Sewerage Flooding 6. Garage Door Barriers

29. 29 Resistant and Resilient Measures 29

30. 30 Watertight Sewage Backflow Prevention£150 - £450 Smart Airbricks£250 - £750 Repointing£500 - £1000 Demountable Barriers£1,500 - £3,000 Prices are guided prices and may vary depending on the site GroundSure: Environmental Searches 30

31. 31 Which environmental report to use? 31 Homescreen Contaminated land, ground stability & flood screen Homebuyers COMBINED Contaminated land, ground stability & comprehensive flood Screening Contaminated land & flood screen <15ha Review More detailed report in the industry, FULL Flood <5ha Residential Flood Comprehensive flood report: EA & NaFRA data JBA surface water BGS groundwater Commercial Floodview Comprehensive flood report <10ha: EA & NaFRA data JBA surface water & reservoir failure BGS groundwater & confidence areas

32. 32 Residential and Commercial Flood 32

33. 33 THANK YOU Questions? CONTACT David Kempster Email: david.kempster@groundsure.com Tel: 08444 159 000 Mob: 07780 455635 www.groundsure.com