Fears that flooding will increase insurance and bring down house prices

The UK’s worst flooding in living memory is driving well-founded fears of increased costs among already cash-strapped households and could potentially bring down property prices in some areas, a survey by insurance broker Policy Expert has found.Flooded homes

Fears that insurance costs will rise fast

The survey, completed by 3,000 customers, showed that a majority fear they will have to set aside much more of the household budget for home cover costs than previously.
Nearly 52% felt certain that the flooding, and threat of more flooding in future, will increase their premiums considerably. In fact, experts say the recent floods will push them up by £19 over the next 12 months alone.
The rise will depend to some extent on where you live, but premium increases of 5% to 10% will be commonplace, hitting already cash-strapped households even further.
If flooding becomes more frequent and widespread, as many scientists expect, such relatively large increases could be seen regularly, on top of the usual inflation-based amounts.

House prices could be hit hard

Another, potentially more financially damaging, effect of the floods could be on the market value of people’s homes.
Not so long ago, homes built on flood plains were snapped up without much thought by buyers. But unfortunately for those who now own properties in ‘at risk’ areas, 95% of respondents said they wouldn’t ever consider buying a home built on a flood plain, with 3.5% being uncertain whether they would or not.

With the Environment Agency stating that one in six homes in England and Wales are at risk of flooding, this doesn’t bode well for the prices of those homes in ‘at risk’ areas; if flooding continues to increase in scale and impact, home buyers will no doubt become increasingly sensitive to the potential of flooding, possibly forcing down the value of homes in some areas previously thought of as ‘safe’.
And unfortunately for some property owners, many homes may become simply unsellable.

Flooding solutions

Is there anything that can be done to ensure fewer properties are flooded in future and to safeguard those homes built on existing flood plains? A number of solutions have been proposed, all of which would involve some cost to the tax-payer, but which may become a necessity if flooding gets progressively worse.

It’s generally accepted that we will need a combined approach that would include some, if not all, of the following:

  • Letting certain areas flood – Some areas should be allowed to flood, with lagoons and other natural water barriers being created. These areas would retain water which would otherwise flood more key areas of population (whether that’s villages and towns in rural areas, or cities).
  • ‘Blue-green’ cities and towns – Create areas in towns that in normal conditions are public spaces, but during heavy rains and flooding become water catchment areas, preventing flooding in other parts of urban environments.
  • Build homes on stilts – In Holland, many knew homes are built on raised structures, with living areas on first and higher floors, so that flooding occurs in storage areas, or ‘beneath’ the home.
  • Gardens in the sky – Some experts suggest turning large flat areas on the tops of buildings in to green oases in our cities, absorbing large amounts of water.
  • Raising roads – This is, of course, a very costly option, but will help prevent communities from being cut off during floods.
  • Attenuating roof drains – New homes should be built with flat roofs which are specially adapted to store rainwater, and then let it drain slowly away. Current homes could be adapted and people incentivised to make the change. Some experts believe this would go a long way to solving the problem of flooding in towns and cities.
  • Re-forestation – A number of experts argue that targeted, large amounts of tree planting in key flood areas would dramatically help. Rainwater, instead of flashing off the land, would be channelled by the trees roots, and soil channels around them, deep into the ground to act like a vast sponge.

Policy Expert

We’re dedicated to helping customers find the insurance policy that’s right for them. Our customers are at the heart of everything we do, so we have a team of experts with a real passion for making sure people get the cover that’s right for them. To speak to one of our experts, call 0203 014 9300 or email ask@policyexpert.co.uk


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