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Floods and record-breaking temperatures used to be rare occurrences in the UK, but in recent years they have become more frequent. 

Climate change is here, but adapting to cope with extreme weather often gets overshadowed by the focus on reducing greenhouse gas emissions and achieving the Government's target of net zero by 2050.

While the latter is crucial to reduce further impact, there is no ignoring what is already happening, and will continue to happen. It has huge implications for real estate.

In the residential sector, there is the drive to insulate homes to make them more energy efficient and to reduce emissions, which is the sensible first step.

But overheating is going to become more of an issue. Patrick Morris, Partner at Trowers & Hamlins says: "Even if we manage to keep to the goal of a 1.5°C increase in temperature by the end of the century, the Met Office predicts warmer summers and more frequent heatwaves in the UK. That means we'll end up with properties which may not be very pleasant to live in."

Commercial buildings are more likely to have air conditioning, and while that increases a building's energy consumption, it does mean less of a problem from rising temperatures in the short term, Better design, with natural ventilation and shading is a better bet in the long term  particularly with rising energy prices.

Make adaptation part of the design

Prevention is better than cure, or rather more cost-effective, so making sure that new developments are designed to cope with extreme weather is the best option.

"Climate change is the new normal. If your building isn't designed to cope with warmer, wetter weather, it will have to be adapted at some point," says Rubianka Winspear, Associate at Trowers & Hamlins.

"So why not avoid that locked-in risk by building in climate adaptation features now?"

Such features could include external shutters, which have been found to be an inexpensive solution to keeping buildings cool in hot weather. The positioning of buildings can also help. New housing developments can be designed so windows aren’t facing the afternoon sun, for example. Or clusters of buildings can protect each other with features that cast shadows – with trees and public green spaces used to help reduce urban temperatures.

"If you are starting development from scratch, it’s an awful lot easier to make buildings resilient to extreme weather," says Amanda Stubbs, Partner at Trowers & Hamlins.

New developments already need to have a number of flood prevention features, such as attenuation tanks and porous pavements. Developments can also be built up, so they sit above a flood plain but here, there is a risk of directing the floodwater into a different area.

Stubbs has had a couple of cases where homeowners have tried to sue developers of schemes that have been built up to avoid flooding and inadvertently diverted the natural course of the floodwater into their homes.

"With climate adaptation, you've got to think beyond the immediate development; solutions need to be appropriate to the wider area," she says.

Cost of retrofitting buildings

However, the more challenging issue for the real estate sector is adapting existing buildings and the cost of doing so. A report by the Climate Change Committee estimated that retrofitting shutters on residential buildings was four times more expensive than making them part of the original design.

If you are a commercial landlord, how do you recoup the cost of adaptation work? Morris says: "Landlords will naturally want to pass on the cost to tenants, but the service charge is mostly about repair rather than upgrade or replacement.

"Nonetheless, it makes good financial sense to adapt buildings as it could impact the value of the property and the ability to get insurance. There is a green premium, or brown discount, as sustainability and climate credentials are something that investors look at," says Morris.

Investing in adaptation for climate change also mitigates the risk of accelerated obsolescence or so-called ‘stranded assets’.

Currently, much of the focus is on reducing greenhouse gas emissions and achieving net zero, without specific legislation requiring climate change adaptation. Minimum Energy Efficiency Standards (MEES) legislation is intended to encourage more efficient buildings which cost less to run, while potentially imposing penalties on landlords who let substandard buildings (currently those with an Energy Performance Certificate rating below an 'E' although this is planned to ratchet up up. For privately rented homes, the Government is proposing to bring the majority of properties up to at least EPC band C between 2025-2028 while for non-domestic properties, the Government has confirmed the requirement to meet EPC Band B by 2030.

Will action be forced on the industry?

But that doesn’t mean further legislative and regulatory change won’t be introduced to deal with adapting property for the impact of climate change. There are two potential avenues for this.

The Heat and Buildings Strategy (published October 2021) specifically refers to new buildings being future-proofed and being made resilient to the impact of climate change with reference to overheating risk, flood risk and water scarcity.

Winspear says that it is encouraging that climate adaptation is being considered but detail is required on how measures are expected to be implemented. Unfortunately, there doesn't seem to be a focus on retrofit adaptation measures:

"Climate adaptation is clearly being considered in the context of new-builds but landlords also need guidance on how to address climate change risk in their existing buildings."

The Future Homes Standard will come into force in 2025. This will focus on new-builds, and it is expected that mitigation against overheating will be covered off as a requirement of the new standards.

While there are no new regulations yet, Stubbs warns that the longer we wait to address the issue of climate change adaptation, the higher the chances are for large scale damage and potentially loss of life from extreme weather events, such as that seen in Germany and Belgium this summer.

Central London is mostly a flood zone three, the highest risk, but it is never flagged as such when buying property because of the Thames Barrier. Stubbs says: "There is an awful lot riding on the Thames Barrier. With rising sea levels and more extreme rainfall events, is the Thames Barrier going to be enough?"

The advice is to plan and act on climate adaptation sooner rather than later.