Water, water everywhere – but rationing looms

Copyright: David Lawson – first published Property Week June 2007

After the wettest winter since 1914, threats that water shortages could paralyse large parts of Britain’s business community appear to be fading. But the problem has merely been postponed.  Modern buildings gulp down millions of gallons of water to stay cool. Electricity supplies also rely on power stations which consume more water than the rest of the population put together. An indication of the potential threat has emerged in Italy’s economic heartland, which is expecting widespread power cuts within months following a winter drought.

  The UK government is desperately trying to stave off crisis with compulsory metering and tougher building regulations. Most commercial property is already metered but new development could be forced to adopt the BREEAM standard on washing and toilet use of as little as 15 litres per employee per day.  Attempts to ameliorate shortages reveal how combating climate change will raise huge contradictions. Plans for hundreds of thousands of new homes and massive commercial expansion in the south-east – where supplies are already at breaking point - could mean far more draconian measures. The spectre of rationing is already being raised by some forecasters

   The biggest contradiction, however, is that developers and investors face an equal threat from too much water. A frantic scramble to use every scrap of land has increased risks of problems from flooding as sea levels rise.  Doubts persist about ambitious plans to concrete over large areas of the Thames gateway which are prone to flooding. But potential problems are far more widespread than such obvious flood plains. You don’t have to be near the sea to be in danger.

  A College of Estate Management study published early this year raised relatively few ripples among developers and occupiers despite drawing the startling conclusion that more than £220bn worth of property is at risk from swollen rivers and bursting sewers in England and Wales.   Around 25% of owners in 1.7m homes on flood plains remain ignorant of the threat to their homes.  But commercial landlords and occupiers are no better informed, and will be in for a shock as insurance premiums soar and values plunge as this unsung aspect of global warming sinks in.

  Developers should have no excuse. Government guidance note PPS25, which requires applications in high-risk areas to be assessed by Environment Agency officials, was well flagged up before introduction this year.  This message will be reinforced by the proposed standard planning application form, which includes requirement for a flooding assessment. In fact, many local authorities are already refusing to register applications without this information if there is the slightest hint of risk, says Duncan Parr, a director of planning consultant Savills Hepher Dixon.

  A mountain of guidance is available on how to create these reports but they can still require clarification by officials. That has led to delays and extra expense for even modest developments because the EA does not have the manpower and resources to cope with the surge of new responsibilities.  Andrew Warner, chairman of the RICS planning and environment policy panel, welcomed stricter requirements for EA consultation earlier this year but said lack of resources meant requests for advice were often met with long delays and standard letters telling developers not to proceed until it had more time to consider the application.

    Even if there were enough staff, delays are inevitable. The EA makes its decisions based on strategic flood risk assessments which are part of the new local plan system, which is only just being written, says Parr. Officials are blocking development until those plans are ready, which could mean large tracts of land are sterilised for up to two years as local authorities struggle with their own lack of manpower.  As development pressures grow, the situation can only get worse - just at a time when the government is screaming for more housing. That could increase pressure for release of greenfield sites, greater density on brownfield land or even redirection out of the crowded south east, he says.

Property values are under threat because major investors are failing to check any increased risks of flooding, according to research by the College of Estate Management. It warns that high risk areas could become uninsurable, preventing development and undermining demand from occupiers. CEM recommendations include:

The impact of flood risk on commercial and residential property and stakeholder strategies - available free at www.cem.ac.uk/research