How air quality impacts property value

Air pollution has significant implications for health, and with increasing data on the areas where it is most potent house prices are also likely to be affected

Author: Philip Wilbourn

07 October 2019

The atmosphere is a precious, thin layer of gas surrounding the planet, and is only 12km thick at its maximum. Where would 12km take you at ground level from RICS head office on Great George Street? Gunnersbury Park to the west, Bounds Green tube station to the north, London City Airport to the east and Croydon University Hospital to the south. You can't even get to the M25. Such is the shallowness of this gossamer layer of life-giving atmosphere. However, the air we breathe is increasingly dangerous to our health.

Globally, around 8.8m deaths a year are attributed to air pollution, predominantly in developing countries. A 2016 joint report by the Royal College of Physicians and the Royal College of Paediatrics and Child Health stated that air pollution causes the premature deaths of up to 40,000 people a year in the UK, with an estimated 29,000 caused by particulate matter and 23,000 by nitrogen oxides, allowing for some overlap between the two.

The cost of air pollution to the UK economy has been estimated by the World Health Organization (WHO) to be £54bn a year, or around 3.7 per cent of national GDP. It is even higher in some European countries; in Bulgaria for example it is estimated to be equivalent to 29.5 per cent of GDP. Some 91 per cent of the world's population live in places where air quality exceeds WHO guidelines for key pollutants, and that even includes those living in rural areas.

Historically, the main form of air pollution in both developed and rapidly industrialising countries has been high levels of smoke and sulphur dioxide from domestic and industrial combustion of fossil fuels. Yet the major threat to clean air is now posed by traffic emissions: motor vehicles running on petrol or diesel emit a wide variety of pollutants, principally carbon monoxide, nitrogen oxides, volatile organic compounds (VOCs), and particulate matter such as PM10, from exhaust fumes, tyre wear and brake dust. All of these have an increasing impact on urban air quality.

It is important to note too that, although electric vehicles are often referred to as generating zero emissions, they still produce non-exhaust particulate matter at a rate equal to internal combustion engines. Switching from a combustion engine to electric cars will therefore not necessarily eliminate vehicular pollution. Motorway service providers have found that the provision of electric vehicle charging points can double the energy load required.

So, while the cars may not emit carbon the power stations do and people feel that they are green, in reality they have simply pushed the emissions out of sight and out of mind. Of course, the transition to renewable energy sources can offset this, but not entirely. We still need fossil fuel in the short to medium term to cover demand from homes and businesses for comfort cooling in more and more extreme weather conditions. Is the electric car really the way forward?

Emissions from aviation and internal combustion engines form clusters of concentrated pollution, around London’s Heathrow Airport for example, and similar hot spots can be found in urban areas and along motorway corridors. But the truth of the matter is that all parts of the UK are affected by air pollution to a lesser or greater extent; the second highest concentration of PM10 for instance is around Stanford-le-Hope in Essex, a commuter town. Furthermore, pollutants from vehicles are not only a problem in the immediate vicinity, but can also be dispersed across wider areas as a result of weather and air movement.

Inside the home, while dirty cookstoves and fuels have largely been removed in European countries, the growing popularity of wood-burning heaters increases pollution in houses and in the immediate vicinity of the property. These domestic wood-burners produced 51 per cent of all PM2.5 emitted directly into the air in 2017, as shown by a recent EU report. The UK's National Atmospheric Emissions Inventory (NAEI) meanwhile estimates pollutant levels annually, and has created an interactive map, which gives consumers an indication of the impact on air quality from a wide range of the most common pollutants. It is not a reassuring picture.

Bad air and buildings

Poor air quality also has an impact in the workplace, and buildings that focus specifically on minimising VOCs and enhancing ventilation enable better cognitive functioning by occupants than those with higher levels of indoor pollutants and lower fresh-air intake. However, the energy consumed by air conditioning systems can produce local warming and emissions that exacerbate the urban heat island effect. Global energy demand for such systems is expected to triple by 2050, while air filtration systems can also significantly increase energy usage, thereby creating a pollution multiplier effect.

There is thus a huge amount that landlords and facilities managers should be doing to improve the built environment. A good starting point would be installation of air-quality monitors in buildings to determine how best to use ventilation. There should be a company-wide clean energy strategy as part of this approach.

When it comes to the residential market, public awareness of air pollution is currently low but beginning to rise. We have to bear in mind that we spend 90 per cent of our lives indoors, and the environment in which we spend that time is vitally important. Awareness of the risks of living with air pollution were brought into sharp focus by cases such as the 2013 death of a nine-year-old in London following repeated asthma attacks, which an inquest earlier this year linked to her having lived within 25 metres of the South Circular Road.

We spend 90 per cent of our lives indoors and the environment in which we spend that time is vitally important

Recent citizen-funded advertising campaigns highlight the link between air pollution and health issues, with billboards carrying slogans such as 'These houses cost an arm, a leg and a lung', 'Location, location, lung disease' and 'The neighbourhood's gone to the docs' appearing across London for example.

A variety of government and private websites such as the NAEI map or provide a new level of granularity for homebuyers to consider. According to a report in the Daily Telegraph, property agent Henry Pryor stated that people have learned that homes on opposite ends of the same street can have different levels of pollution. He estimates that pollution can reduce the price of a home by up to 15 per cent compared to a similar property in a less polluted area. But the wind blows and air pollution is not inert, so the quality does change from location to location over time.

Some people are also calling for an air pollution rating for each property, which would have a significant impact on housing values: if such an initiative were developed, there is a danger that housing with the worst ratings would be the only property affordable for the most vulnerable in society.

Unless and until transportation becomes carbon-neutral, it will have an increasingly greater impact on real-estate values. Government initiatives are aiming to reduce pollution from industry and from domestic sources, but the real-estate sector has to do much more than it is currently. It needs to focus on:

  • heating and cooling homes without high energy consumption
  • developing passive filtration designs
  • banning wood-fired heaters in urban areas, as these increase pollution in the home and its immediate vicinity.

As awareness of the health risks grows, consumers and other stakeholders such as lending institutions will become much savvier about where they choose to buy homes. Air pollution is becoming an important location factor, and with increased climate change it is likely to kill an awful lot more. This will have a significant impact on real estate in all its forms.

Philip Wilbourn FRICS is CEO of Wilbourn & Co. chartered environmental surveyors

Related competencies include: Sustainability

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