It is not unusual to be out of your home for around nine months whilst repairs and reinstatement works are carried out. Alongside this, it is now widely acknowledged that being flooded can negatively impact people's mental health, and ultimately also pose a risk to life. The 2007 UK floods saw 13 people sadly lose their lives. In the 2021 European floods, 242 people lost their lives. Despite this, 67% of people do not know the flood risk to their homes.
Understanding flood risk
There are various different types of flooding, including surface water, river & coastal, reservoir, groundwater, and sewer flooding. Flood maps are available for river & coastal, surface water and reservoir flooding.
Surface water flooding affects more people than all other types of flooding combined, with in excess of three million properties estimated to be at risk. If you don’t live near a river or the sea, it’s not unreasonable to think that you are not at risk of flooding, however, this may not be correct. Surface water flood maps have only become readily available within the last 10 years, and therefore if you have not moved home within this time period, you may be unaware you’re in a flood risk area.
Property values & flood risk
A 2009 RICS (Royal Institute of Chartered Surveyors) paper states that flooding can negatively impact a property’s value, with the impacts ranging from negligible to severe (circa 30%), however, values usually recovered three years post flood. There are clearly a wide range of factors involved, such as the severity and depth of flooding, risk, ability to defend the property and, location. The benefits of living on a floodplain have often been seen to counterbalance or outweigh the drawbacks of a potential flood, however, as flood risk increases with climate change, this balance may be altered.
The Environment Agency currently reports flood risk based on the chances of an area flooding in any one year. It rates areas with return periods such as 1 in 100-year to a 1 in 30-year chance of flooding as being at “medium” risk. Zurich has warned that when viewed over a typical 30-year mortgage, this equates to a 26% and a 63% likelihood of being flooded once in that period – a far greater risk than the current terminology suggests.
Market forces can also artificially alter the value of flood risk properties. Amid the rush to complete sales ahead of the stamp duty deadline, flood risk may have not been considered and, as surveys aren’t required to show the risks, the onus falls on buyers to find out whether a home lies in an area at risk of flooding. Due diligence is vital.
Insurance
The ability to obtain home insurance can drastically impact the value of a property. An uninsurable property may be unmortgageable and thus be worth considerably less than it otherwise may have been. Most homes in flood risk areas are currently insurable thanks to the government-backed re-insurance scheme ‘Flood Re’. It is important to consider that this scheme is due to end in 2039, which is within the period of most mortgage terms. When Flood Re ends, the insurance market is expected to revert to risk-reflective pricing. High flood risk could certainly mean high premiums (if insurable), which could negatively impact property values.
Commercial properties are not covered by Flood Re and thus high-risk commercial properties can prove difficult to insure.
Making properties resilient
With Flood Re due to end in just 18 years, it is paramount that action is taken now to implement property flood resilience (PFR) measures and ensure the UK’s housing stock is more resilient to flooding. PFR consists of two main areas – resistance and resilience.
There are various different measures that can reduce the flood risk to your home or workplace, with different levels of protection offered. The main difference between flood resistance and resilience is that resistance aims to prevent water from entering a building (with equipment such as flood barriers), whereas resilience aims to reduce the damage that is done when water has to enter a building, and speed up the recovery process.
Flood Resistance tends to be the preferred method by most, however, in all situations, this is not suitable as the measures depend on the construction style and risk. In deeper floods, to avoid structural damage, resilience should be adopted.
Due diligence
It is of vital importance to understand the flood risk of a property before purchasing it. If a flood risk is highlighted, you should instruct a qualified flood risk consultant to conduct further due diligence.
For the majority of us, our homes will be the most expensive purchase we will ever make, and so due diligence on flood risk is vital. Would you buy a second-hand car that has no MOT or service history?
Ensure you understand whether flood risk may worsen in future due to climate change. Should you wish to redevelop a property, remember that you will have to prove to the local regulatory body, often the planning authority that the development shall not place any risk to its occupiers, and that flooding is not worsened elsewhere. Carrying out these checks early on will ultimately aid in safeguarding your investment.
