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If you own a house or flat that is situated on land that has been contaminated due to prior industrial use, this can make it somewhat harder to find a buyer for the property. In this guide you can learn more specifics about the challenges involved with selling this type of home, as well as get advice on how it might still be possible to sell it for a speedy and fair offer.
- What does it mean to own a property on contaminated land?
- How to determine whether your house is located on contaminated land
- Reasons why buyers may not want a home on contaminated land
- Mortgage complications when selling a property on contaminated land
- Can you remediate contaminated land before selling a house?
- Options to sell a home that is situated on contaminated land
- Selling a home on contaminated land: Frequently asked questions
What does it mean to own a property on contaminated land?
When you’re trying to sell any type of home, it’s important to know as much about the property as you can so that you can inform prospective buyers. And one of the biggest questions you should resolve ahead of selling is finding out whether the home is on contaminated land.
The UK government’s legally recognised definition of contaminated land is set out in a law known as the Environmental Protection Act 1990, as explained in guidance published by the Department for Environment, Food & Rural Affairs.
Section 78(A)(2) of the law says such land is any “which appears to the local authority in whose area the land is situated to be in such a condition, by reason of substances in, on or under the land, that (a) significant harm is being caused or there is a significant possibility of such harm being caused; or (b) pollution of controlled waters is being, or is likely to be, caused.”
In terms of the harm that the contamination could cause, this can include health harms to people such as cancer or birth defects, but harm to the environment can also count.
Should you own a home that is located on contaminated land, it’s important to understand that many prospective buyers might view the status of the land as a dealbreaker. But that does not mean you have to give up all hope of ever selling your property, because you still have some options available for getting a fast and fair offer, and this guide explains those choices.
How to determine whether your house is located on contaminated land
As the owner of your home, you might already know that it is contaminated, but there are potentially thousands of owners that may be unsure about the status of their land.
According to one government document, the Environment Agency has previously estimated that there about 325,000 residential sites in England and Wales with contamination, covering about 300,000 hectares.
That’s why it can be a good idea to do some research as part of the selling process to determine whether or not the land on which your property is located may be contaminated.
If the land was contaminated before you purchased it then it’s possible that the previous owner will have disclosed information about the problem and whether or not it has been addressed, and this should be enough for you to know about the status of the land.
Alternatively, you or your solicitor or other legal representative could perform a search, which is information gathering from the Environment Agency, the local authority and other agencies to find out if the land is contaminated. Be aware that if you ask a solicitor to do this search that the cost can easily be several hundred or thousand pounds depending on the work involved.
Reasons why buyers may not want a home on contaminated land
Should you be attempting to sell a property that is located on contaminated land, it’s important that you learn about the various reasons why certain buyers may immediately lose interest in wanting to make an offer on it, or why they could view your home as less valuable.
If you are the person that is responsible for the contamination at the land, then you will legally be liable for having to remediate it, as the law firm Stevens & Bolton says. Some potential buyers might worry about such liability transferring to them if they were to end up owning your property, and this fear could be enough to cause someone to no longer want to make an offer.
Another reason why someone might not want to own a home on contaminated land is the potential costs that they could face if they decide they want to remediate the pollution as the next owner. If they are looking for their next dream home on a budget, they may decide that the expenses involved with fixing the land as the future owner would be too high.
Regardless of whether the contamination at the land has been cleaned up or is still a threat, the stigma of owning a home on such land can be another barrier to finding a buyer on a speedy schedule. There are many people that could believe owning such a home has too much stigma associated with it, and therefore they won’t want to make an offer.
Buyers who have certain health conditions may also immediately lose interest in your property once they learn that it is on contaminated land. They could worry that the contamination, whether it has been cleaned up or not, might exacerbate whatever health problems they have, and this factor alone can explain why they no longer want to own your home.
Mortgage complications when selling a property on contaminated land
Beyond the stigma and liability concerns that buyers could have with your house or flat on contaminated land, whether or not they can get a mortgage can be another serious hurdle.
If you are attempting to sell your house or flat as is on contaminated land without remediating the health risk, this might cause some problems for a buyer that needs a mortgage in order to afford purchasing it.
That’s because home loan lenders will have concerns about the integrity of your property and questions about the contamination at the land, and whether this will make it hard or impossible for them to resell the home in the future if they need to. If someone takes out a mortgage then they commit to repaying it thoroughly monthly instalments with interest, but if they default on the loan then the lender can repossess the home and sell it to recoup the remaining debt.
The mortgage provider might believe that it will be challenging to sell the property in the future if needed, and therefore reject the loan application. If a buyer needs such a loan in order to afford purchasing your property, this will inevitably make selling to them impossible.
But rest assured that there are still strategies available for selling a home on contaminated land in this situation. One option is to get in touch with LDN Properties or another quick buyer that is well known for buying such homes. You would not only get a speedy sale that should be completed within a few short weeks, but you can also avoid having to pay any commission.
Can you remediate contaminated land before selling a house?
It’s very likely that a large number of buyers will view your home as a problem property because of the contamination on the land. And they will either completely lose interest in making an offer, or they will significantly reduce the amount that they’re prepared to offer for the home.
As noted earlier in this guide, a homeowner’s potential liability for problems that arise from contamination on their land can be a barrier to finding a buyer for your home.
Remediation can be a solution, and this can be one or more techniques that are used to remove contaminated soil from the land or otherwise eliminate the health risks from any pollution. The exact cost and scale of the remediation work will depend on the issue on your land.
Some of the commonly used practices include in-situ treatment where harmful substances on the land are broken down; excavating and removing contaminated material like soil from the property altogether; placing an impermeable cap over the contaminated part of the property in order to prevent the pollution spreading; and various other options that can also include treating water, as engineering firm Patrick Parsons says.
If you were to launch a remediation project at your land and eliminate the risk from the contamination, this could remove it as a concern for buyers. This in turn would help to avoid a situation where a buyer dramatically reduces their offer because of the contamination. Therefore, you might want to consider corrective work ahead of trying to find a buyer.
But you should be aware that such work can take many months and easily cost hundreds or thousands of pounds – neither of which are good outcomes for those owners who would like to sell their property as fast as they can, or who are trying to keep their expenses low.
Should you lack the time, interest or funds for pursuing remedial work on the land before selling then the good news is that you will still be able to sell your home. For example, you could contact a no-fee quick buyer like LDN Properties that has purchased many such homes in the past, and this will also secure a speedy sale that should be completed within a few short weeks.
Options to sell a home that is situated on contaminated land
When you are prepared to find a buyer for your property that is on contaminated land, you will have to choose which of four methods you would like to use for selling – contacting a quick home buyer, selling at an auction, selling on your own or selling via an estate agent.
There are clear benefits and drawbacks with each of the strategies based on their cost, time taken and more. For example, you will need to pay commission that will add to your expenses and be subtracted from the property’s sale proceeds if you use an auctioneer or estate agent. But you can prevent having to pay any fees by selling to a zero-commission quick buyer.
To assist in narrowing down the options, write down your main goals with the sale such as your ideal selling price, how much commission – if any – you are prepared to pay, and how fast you would like to sell. Then compare all of these factors against the specific details of the four selling methods below and this should help you find the one that most closely matches your needs.
Selling to a quick home buyer
Quick buyers earned this title because they have the funds in place to buy homes immediately, with no waiting for weeks or months to first secure a mortgage to afford the purchase. This reduces the timeline when selling this way to a few weeks from beginning to end, and that includes the vital last steps of paying you the full proceeds and exchanging contracts..
And these companies are experts at making competitive and fast offers to buy all types of leasehold and freehold homes no matter their age, condition, location, shape or size, and regardless of any potential problems they have, such as being on contaminated land.
LDN Properties has been purchasing homes throughout the UK since 2003, and has plenty of experience with buying and making offers not only for properties on contaminated land but also houses that do not have a Heating Equipment and Testing Approval Scheme certificate, vandalised flats, smoker’s homes, properties with noisy neighbours, investment houses, buy-to-let flats, properties with asbestos, homes that are located above commercial premises and many other varied scenarios.
Selling to an honest no-fee quick buyer is also a great way to avoid having to pay any commission on the sale, especially compared to selling through an auctioneer or an estate agent where you will have to pay potentially costly commission that’s taken out of the proceeds.
Selling at a property auction
For sellers, there can be a lot of waiting involved when selling at an auction, starting with many weeks or more between the day that you select this method and the day the auction happens. If your property then sells at the auction, the winning top bidder will have about a month to finish their tasks needed to complete the sale, such as signing the relevant legal documents.
And it can also be an expensive way to sell any type of home because you will have to pay the auctioneer commission for the work that they do in selling the property. Typically, this is charged at about 2.5 percent of a home’s final sale price but it can be higher or lower, and it will increases your expenses because the fee is taken out of the sale proceeds immediately.
The commission pays the auctioneer for the work that they do in finding a buyer for your house or flat, starting with creating and advertising a listing that describes the home and includes photographs of the exterior and interior, hosting the auction and overseeing a successful sale.
You should also ask auctioneers about their past success rate with selling properties on contaminated land like yours, because an auctioneer that hasn’t managed to sell such homes before could find it difficult to get potential buyers interested in bidding on your property.
Selling on your own
This can be the most stressful way to sell a home on contaminated land because you will have sole responsibility for every task, starting with making a listing and then advertising it. You would also need to organise viewings where you will give people a tour of your property, and then you will have to hear offers from buyers and aim to get one to the exchange of contracts.
It’s a massive amount of work and will require a lot of your time and funds, and it can take more than a year before you are able to find a buyer. That’s why you should only consider this option for selling if you have managed to sell a property on contaminated land in the past, or there’s a suitably skilled family member or friend willing to help out with the selling process at no charge.
Note also that someone can make an offer to buy your home but then later cancel it, and this will make the sale fall apart. It would extend your selling timeline significantly because you would then need to start over with looking for a buyer. And someone can rescind an offer without facing any penalty so long as you have not exchanged contracts with them.
The only notable advantage of selling without any assistance is that you won’t need to pay commission to an auctioneer or estate agent for managing to sell your home, and this reduces your expenses. But you could discover that this saving is wiped out by the funds that you will have to spend on promoting your listing and the various other selling tasks you need to handle.
As an alternative, you might want to think about selling your house or flat to a zero-commission quick home buying company like LDN Properties. This would not only produce the same benefit of avoiding having to pay any fees on the sale, but you will also get the additional perk of being able to complete the entire sale process within a handful of weeks.
Selling with an estate agent
Always check with individual estate agents about whether they have managed to sell a home on contaminated land before, and avoid using the services of any company without this experience because it could suggest that they won’t know how to get buyers interested in your property.
Estate agents will reduce your workload when selling because they will handle the important tasks of preparing a listing, advertising it online, in their office and in local newspapers, scheduling viewings, hearing offers and hopefully taking one to exchange of contracts.
For doing all of this work, an estate agent will charge you commission if they manage to sell your home, and this fee will add to your selling costs because it is subtracted right away from the proceeds. Expect to pay commission within a range between 1.15 percent and 1.40 percent of your property’s final sale price, although the exact rate may be higher or lower than this.
Selling through an estate agent can also be a fairly slow process and it might take more than an entire year before you get a serious offer. And the person making the offer could still later cancel it, causing the sale to fall apart – and they can do this without facing any penalties if you have not yet exchanged contracts. The result would be that you will need to start again with searching for a buyer, which could add much more time to your overall selling schedule.
Selling a home on contaminated land: Frequently asked questions
LDN Properties has been buying a wide range of homes across the UK since 2003, including those on contaminated land – and here you’ll see our answers to queries about them:
Your top questions when selling a house with contaminated land
The Environmental Protection Act 1990 says it is land which appears to the local authority in whose area the land is situated to be in such a condition, by reason of substances in, on or under the land, that (a) significant harm is being caused or there is a significant possibility of such harm being caused; or (b) pollution of controlled waters is being, or is likely to be, caused.
There are a few ways to determine whether or not the land at your property is contaminated, and perhaps the simplest would be attempting to contact the previous owner. If this is not possible then you or your legal representative can launch an environmental search that will seek information from the council and other agencies to see if the land is contaminated.
If you are attempting to sell a flat or house that is situated on contaminated land then you might discover that prospective buyers are reluctant to make an offer for one or more reasons. They may worry that they could be liable for any damage caused due to the contamination, or they could fear health problems and stigma that might be linked to the contaminated land.
It’s possible that someone could get approved for a loan to buy your home but you will more likely find that lenders are wary about granting a mortgage for any property on contaminated land. These companies might worry that the home will be impossible to resell in the future if they need to repossess and sell it to recoup their costs should the buyer default on the loan.
You can assess whether you have the money, time and interest needed to pursue remediation work at your property before trying to find a buyer. But you should be aware that it could take many months and possibly thousands of pounds to fix any problems with the land, and this might not be feasible if you’re trying to keep your costs low or sell on a speedy schedule.
When you sell any type of property through an estate agent or at an auction then you will have to pay them commission if they manage to find a buyer for the home, and this will be deducted immediately from the sale proceeds. You can avoid paying any commission if you instead sell without any third-party help or if you sell to a no-fee quick buyer such as LDN Properties.
If you choose to sell your home to a quick buyer then the overall timeline should not be more than a few short weeks, and this includes the time needed to exchange contracts and pay you the full proceeds. But if you decide instead to sell your property at an auction, via an estate agent or without any assistance then it can take at least several months or more.
