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Mortgage with Contaminated Land

See how expert advice could help secure a mortgage on contaminated land

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Pete Mugleston

Author: Pete Mugleston - Mortgage Advisor, MD

Updated: June 8, 2022

Buying a house on contaminated land

We get lots of questions about contaminated land from buyers who want to buy a house on potentially contaminated land.

If you have concerns about how contaminated land could affect your property as well as you and your families health, then you should talk to one of the advisors we work with, they are experts when it comes to these sorts of problems and can help you find the best deal, even if you’ve been declined for a mortgage or you’re looking for a bad credit mortgage.

To give you the information you need about contaminated land, we’ve created this guide which includes:

If you would like to speak to an advisor about getting a mortgage for a property on contaminated land, contact Online Mortgage Advisor here.

Can I get a mortgage for a house on contaminated land?

Often, people find their ideal property and then later come to learn that the house is potentially situated on contaminated land.

In some cases, a contaminated property may need remediation work which can have huge financial implications as well as making difficult it to sell or re-mortgage.

As well as this, if you default on your mortgage and the lender has to repossess the property, they may be left liable to pay for any remediation work.

Because of this, as well as the risk of poor resale ability, most lenders will be reluctant to lend and you may find it difficult to get a mortgage.

However, if the risk of the contamination is deemed low, it may be possible to get a  mortgage to buy a property on contaminated land.

This is why you need the right advice from one of the brokers we work with, they are experts in this area and can help you find a successful outcome.

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What is contaminated land and why is it a potential problem?

Contaminated land is a term used to describe land that is polluted by either:

  • Heavy metals such as arsenic, cadmium and lead
  • Oils
  • Tars
  • Chemical substances
  • Solvents
  • Gases
  • Asbestos
  • Radioactive substances

This can cause serious harm to both people and animals, hence why many homeowners worry about the risk of their property being built on contaminated land. As well as this, the above substances can cause pollution to lakes, rivers or ground waters.

Why would land be contaminated?

Sometimes properties are built on land that may previously have been used as a:

  • Factory
  • Mine
  • Steel mill
  • Refinery
  • Landfill
  • Farms

Often industrial sites can release bi-products such as metals or gases and these can remain in the ground and atmosphere long after the demolition of the previous building.

How do you find out if your land is contaminated?

Before you buy any property, it is advisable that you get an Environmental Search.

This can help you get a clearer overview of the properties condition as well as any risks that may occur in the future.

An Environmental Search will provide you with a report on:

  • Flooding
  • Ground stability
  • Radon
  • Contaminated land

It may be the case that your report will show no risk, however if it does, you may need to investigate further or contact your local council for more information about the land.

You could also write to your local council and ask for any information on the land including whether the site has been risk ranked in accordance with their Contaminated Land Strategy. If it has, the land should have been categorised as low, Medium or High.

What to do if you discover your property is on contaminated land

If you discover that your property is built on land that is contaminated and potentially hazardous to you, your property and the environment, then there are measures you can take as there will be a responsibility for the ‘relevant person’ to clean up i.e. remediation.

The Environmental Protection Act states that the responsibility for cleaning up contaminated land is generally the person who caused the contamination.

However it can often be impossible to identify the individuals or companies that caused it as the contamination could have been present for many years.

This unfortunately leaves the current owner or occupier of the land responsible.

Get a copy of the building’s Warranty Certificate from the sellers

This is also known as a NHBC certificate (or cover note.) If it is dated after after the 1st of April 1999, its policy should provide insurance cover for contaminated land and the cost of it being managed or cleaned.

That being said, this is not always the case so check the policies information carefully to ensure that the policy schedule shows contaminated land cover is included.

Get Residential Contaminated Land Indemnity Insurance

This is a policy will protect you against any losses which you incur, should you need to comply with a remediation notice.

Policy costs can vary so it may be cheaper to contact your local council to check their records if there is contaminated land. Some councils do have charges for this, although some are happy to check their records for the land for free.

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Are there lenders who will approve a contaminated property mortgage?

Ultimately, every lender is different and each one will have different criteria when it comes to lending for properties on contaminated land.

Some specialist lenders deal with more complex areas such as this more frequently. For some borrowers, this can be a better route when it comes to finding a lender who will be more understanding about properties on contaminated land.

It may be possible to find a mainstream lender in the right circumstances, however, this isn’t always possible as some have strict criteria that prevents them from lending on high risk properties.

That being said, there are lenders who may be OK with lending to you and the expert brokers we work with know who they are.

Can I get a mortgage on contaminated land without a property on it?

A specialist lender may be willing to offer you a mortgage on contaminated land, on the condition that there’s a plan to remediate the contamination. If the person responsible for (or who knowingly allowed) the contamination to happen cannot be located, the current landowner or you as the mortgagee may have to shoulder this task.

Some lenders will likely turn down mortgage applications for contaminated plots outright, considering them ‘unmortgageable’. If you find this is the case, there may be other options, including using a bridging loan to complete the initial site acquisition.

A bridging loan would enable you to buy the site and arrange to have remediation carried out, before applying for a standard land mortgage based on the plot’s post-remediation value. You can read more about bridging for land purchases.

Alternately, if your plan is to develop on the land, you could consider using development finance for the site acquisitions and building funds. Make an enquiry to speak with an expert advisor for more information.

Find a mortgage lender who specialises in contaminated land purchases

The advisors we work with frequently obtain mortgages for hundreds of borrowers, even in cases where they have been declined by another lender.

Contact a specialist broker here for advice about how to get a mortgage for a property on contaminated land.

Speak to a mortgage expert about contaminated land purchases today

If you have questions about buying a house contaminated land or want to speak to an expert for the right advice, call Online Mortgage Advisor today on 0808 189 2301 or make an enquiry here.

Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances.  – We don’t charge a fee and there’s absolutely no obligation or marks on your credit rating.

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We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in all different mortgage subjects.

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

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FCA disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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