Future Climate Info to offer first-of-its-kind air quality property risk-reporting
Air quality property risk-reporting: £25bn spent on homes in polluted postcodes in 2017 as some buyers pay ‘pollution premium’ for poor quality air.
- Homebuyers in England and Wales spent £24.9bn during 2017 in areas where nitrogen dioxide levels are likely to exceed legal limits – affecting one in twenty (5%) residential transactions
- Greater London had the highest percentage of transactions within polluted postcodes (35%), with buyers paying an average 32% ‘pollution premium’ compared with clean air postcodes
- In the worst affected areas of London, over 95% of residential property transactions in the City of London, Westminster and Kensington and Chelsea took place in polluted postcodes
- Outside the capital, the most transactions in polluted areas took place in Slough (12%), Greater Manchester (7%) and Portsmouth (6%)
- Five counties or metropolitan boroughs see buyers pay a ‘pollution premium’: Greater London, City of Derby, City of Nottingham, Cambridgeshire and Greater Manchester
Homebuyers spent a total of £24.9 billion on properties in pollution hotspots across England and Wales last year, with one in twenty transactions (5%) taking place in polluted areas, according to analysis by Future Climate Info (FCI), the environmental risk analysts.
FCI’s research examines property and land data from HM Land Registry alongside environmental data from EarthSense Systems on average Nitrogen Dioxide (NO2) levels in 100m² areas, caused by vehicle emissions and other sources.
Of around 850,000 homes that changed hands in England and Wales during 2017, nearly 41,500 were in areas where average NO2 levels are likely to exceed annual legal limits – worsening in peak traffic and stagnant weather conditions. FCI’s findings highlight the extent to which residential transactions are bringing homebuyers into contact with poor quality air, and raise questions about how well-informed they are about the environments they choose to buy in.
The potential effects of excess NO2 can include long-term health concerns for people spending extended periods in these conditions2, as well as the need for sensitised individuals (such as asthma sufferers) to take extra steps to manage their exposure and exercise accordingly. High concentrations of NO2 are often associated with the presence of other air pollutants.
GREATER LONDON TOPS THE LIST FOR TRANSACTIONS IN POLLUTED POSTCODES
FCI provides conveyancers, solicitors and commercial property lawyers with data and insights on risks posed to property transactions by flooding, energy, infrastructure, subsidence and environmental issues in the surrounding area – including air quality.
Currently, 7% of postcodes in England and Wales have average NO2 levels that are likely to exceed annual legal limits, even if small pockets of land within these postcodes still fall within clean air limits. FCI’s analysis indicate these polluted postcodes accounted for 5% of all homebuyer transactions last year – nearly 41,500 in total – at an average price of £601,109. However, the share of transactions taking place in polluted postcodes is far higher in some parts of the country.
Over a third (35%) of residential transactions that took place in Greater London in 2017 were in polluted postcodes: by far the highest percentage of any county or metropolitan borough across England and Wales.
Outside of Greater London, 1.5% of all property transactions took place in polluted postcodes across England and Wales, with 23 counties or metropolitan boroughs³ exceeding this average.
One in ten transactions within Slough (12%) were affected, while the same was true for more than one in twenty transactions in Greater Manchester (7%), Portsmouth (6%), Thurrock (6%) and Surrey (6%).
Table 1: Top ten counties and metropolitan boroughs by % of transactions affected
| County / met borough | % of homebuyer transactions within polluted postcodes | % of postcodes likely to exceed annual legal pollution limits | |
| 1 | Greater London | 35% | 48% |
| 2 | Slough | 12% | 9% |
| 3 | Greater Manchester | 7% | 7% |
| 4 | Portsmouth | 6% | 11% |
| 5 | Thurrock | 6% | 9% |
| 6 | Surrey | 6% | 8% |
| 7 | City of Nottingham | 5% | 9% |
| 8 | Bracknell Forest | 4% | 9% |
| 9 | Hertfordshire | 4% | 4% |
| 10 | Southampton | 3% | 5% |
Source: Future Climate Info/HM Land Registry/EarthSense Systems Limited
OVER HALF OF TRANSACTIONS AFFECTED IN NINE LONDON BOROUGHS
On a more localised level, FCI’s analysis shows that across London, nine of the city’s central boroughs saw more than half of residential property transactions fall within polluted postcodes.
More than 95% of transactions were affected in three areas of the capital: the City of London, Westminster and Kensington and Chelsea. This reflects the high percentage of postcodes in these areas where average NO2 levels are likely to exceed annual legal limits – even if smaller pockets of land here still fall within clean air limits.
Tower Hamlets, Southwark, Hackney, Islington, Camden and Hammersmith and Fulham also saw more than half of transactions taking place in polluted postcodes.
Table 2: Top ten London boroughs by % of transactions affected
| London borough | % of homebuyer transactions within polluted postcodes | % of postcodes likely to exceed annual legal pollution limits | |
| 1 | City of London | >95% | >95% |
| 2 | City of Westminster | >95% | >95% |
| 3 | Kensington and Chelsea | >95% | >95% |
| 4 | Tower Hamlets | 78% | 94% |
| 5 | Southwark | 74% | 81% |
| 6 | Hackney | 71% | 72% |
| 7 | Islington | 71% | 86% |
| 8 | Camden | 66% | 83% |
| 9 | Hammersmith and Fulham | 63% | 75% |
| 10 | Newham | 49% | 48% |
Source: Future Climate Info/HM Land Registry/EarthSense Systems Limited
Outside of London, 19 local authorities across England and Wales also saw more than 5% of transactions (the national average) take place in polluted postcodes. Worst affected was Runnymede in Surrey, where more than one in five (22%) home purchases fell into this category, followed by Dartford (18%), Manchester (16%), Salford (22%) and Broxbourne in Hertfordshire (15%).
Furthermore, 76 of the 315 local authorities outside of London had a higher number of property transactions take place in polluted postcodes than the national average (1.5%).
Table 2: Top ten local authorities outside London by % of transactions affected
| Local authority | % of homebuyer transactions within polluted postcodes | % of postcodes likely to exceed annual legal pollution limits | |
| 1 | Runnymede | 22% | 26% |
| 2 | Dartford | 18% | 21% |
| 3 | Manchester | 16% | 14% |
| 4 | Salford | 16% | 14% |
| 5 | Broxbourne | 15% | 13% |
| 6 | Epsom and Ewell | 13% | 15% |
| 7 | Slough | 12% | 9% |
| 8 | Spelthorne | 12% | 17% |
| 9 | Hertsmere | 11% | 9% |
| 10 | Watford | 10% | 10% |
| 11 | Elmbridge | 9% | 14% |
| 12 | Trafford | 8% | 9% |
| 13 | South Bucks | 8% | 6% |
| 14 | Bury | 7% | 9% |
| 15 | City of Portsmouth | 6% | 11% |
| 16 | Thurrock | 6% | 9% |
| 17 | Braintree | 6% | 7% |
| 18 | City of Nottingham | 5% | 9% |
| 19 | Basildon | 5% | 8% |
Source: Future Climate Info/HM Land Registry/EarthSense Systems Limited
FIVE COUNTIES OR URBAN AREAS SEE BUYERS PAY ‘POLLUTION PREMIUM’
Postcodes with higher levels of NO2 often fall within central urban areas with higher concentrations of amenities and infrastructure, or otherwise near transport hubs. This can mean the prices paid for properties in polluted postcodes are sometimes higher than in clean postcodes – leaving buyers effectively paying a premium for a property or location that also exposes them to poorer quality air.
In other cases, homebuyers are paying a ‘clean-air’ premium for properties in less urban areas for the benefit of less congested or built-up surroundings.
Within Greater London, homebuyers in 2017 paid £731,409 on average for properties in polluted postcodes compared with £555,315 in clean postcodes: a 32% ‘pollution premium’.
However, outside the capital, the average price paid for homes in clean postcodes during 2017 was £254,350, compared with £244,318 within polluted postcodes: a 4% ‘clean air premium’.
FCI’s analysis shows that there were 24 counties or metropolitan boroughs in England and Wales where at least 100 transactions occurred in both clean and polluted postcodes during 2017. Comparing the average prices paid, 19 areas saw buyers pay a ‘clean air premium’ with the highest being 29% in Hertfordshire.
However, five areas saw buyers pay a ‘pollution premium’. Greater London was the highest (32%), with other affected areas being the City of Derby (12%), City of Nottingham (4%), Cambridgeshire (3%) and Greater Manchester (2%).
Geoff Offen, Managing Director of Future Climate Info, comments:
“Over time, poor quality air can have a serious impact on our health and well-being, so it is important now more than ever to be aware of the risks. Property buyers have started to see it as an equally important issue as the other environmental and social factors we traditionally consider when buying a home.
“Investing in bricks and mortar is one of the biggest decisions most people will make in their lives. In paying a premium to be nearer to urban centres, infrastructure or good transport links, some buyers – especially those in the capital – can effectively end up paying more to breathe some of the nation’s poorest quality air. In other cases, it is clean country air that comes at a premium price of up to 29% in Hertfordshire.
“As air quality continues to become a headline issue and a public health concern, homebuyers and investors will seek out information about what they are buying into and tailor their lifestyles accordingly. For many, this concern will also extend to the workplace as well as the home environment as the public become savvier about the risks to their health.”
Kindly shared by Future Climate Info
