A brand new report from Bayes Enterprise Faculty (previously Cass) reveals how flood threat impacts the English residential property values to lift consciousness amongst coverage makers and regulators.
Information from the report, authored by Dr Alexandros Skouralis, lead researcher and Dr Nicole Lux, Senior Analysis Fellow at Bayes, reveals that residential properties prone to flooding are bought at 8.14% decrease on common in comparison with non-affected properties, which reaches as excessive as 32.2% for the very best threat properties.
Utilizing a singular property worth dataset offered by Rightmove, the UK’s primary property web site, the report analyses the 4.8 million listings and three.2 million accomplished transactions that came about between 2006 and 2022.
For all properties, a property-level flood rating was offered by Twinn by Royal HaskoningDHV that considers threat from fluvial, pluvial and tidal sources. It makes use of superior flood-modelling strategies and incorporates essentially the most present hydrology information from the Centre of Ecology & Hydrology. The mannequin can also be utilized by the key insurance coverage corporations.
Key findings from the report embody:
- Properties at highest threat of flooding are based mostly in East of England, Yorkshire and the Humber and the North West, which usually have flood threat likelihood of between 10% and 12%.
- Semi-detached and terraced properties (9% flood threat likelihood) are extra susceptible to flooding since prevention measures – corresponding to improved home windows, doorways, vents and pipes will solely be efficient along with neighbours versus indifferent homes with solely a 7% flood threat likelihood.
- Total flood threat is predicted to extend for 73% of affected properties by 2080, whereas the likelihood of flooding is ready to extend by an additional 8%. A low-risk property, with a likelihood of flooding beneath 20%, that’s affected by a flood occasion is predicted to be bought at a cheaper price of between 9.6% and 13.6%.
- The worth of decrease priced properties is more likely to be extra affected by flood threat when in comparison with greater priced properties.
The report shines a lightweight on the extent to which local weather change and the elevated propensity of pure disasters is affecting the housing market.
Ed Burgess, Strategic Supervisor in Information Providers at Rightmove stated, “We’ve been on the forefront of knowledge improvements within the environmental area, utilizing our distinctive place because the UK’s primary property web site to assist companies and organisations to raised perceive how local weather components may have an effect on the property market, each now and sooner or later.
Though flood threat is essentially factored right into a valuation on the property advertising and marketing stage, the evaluation reveals the way it will play a extra important function in property valuations by 2050, and is more likely to stand up the record of home-mover issues.”
Dr Nicole Lux, Senior Analysis Fellow at Bayes Enterprise Faculty, warned the findings needs to be a wake-up name for threat safety programmes:
“On this empirical examine we quantify the affect that the chance of flooding has on property valuations,” she stated.
“With sea ranges and unpredictability of local weather set to rise in years to come back, this poses an incredible menace to properties and the housing market – significantly in low-income neighbourhoods.
“Flood threat affect on low-income neighbourhoods is one thing nationwide programmes from the Environmental Company’s flood threat administration plans (FRMPs) ought to keep in mind.
“In any case, market individuals corresponding to property patrons, insurance coverage corporations and so on have already accounted for the flood threat in all their underwriting and pricing.”