The risk of flooding in the UK is growing and could seriously affect the value and amenity of your home or business premises. It is suggested by the Royal Institute of Chartered Surveyors (RICS), amongst others, that there will be an increasing number of floods in the future, due to changes in weather patterns, the amount of new buildings on low-lying areas and other local factors.
The RICS paper which formalised these claims went on to say that many properties which have not previously been at risk of flooding, now are. Of the 28 million homes in the UK, over five million are currently at risk, as well as over 300,000 business premises and many more public and utility services buildings. For most of these properties, the risk of being flooded in any one year is still small but for several hundred thousand properties, especially those which have been flooded in recent years, the risk is more significant.
The increasing risk of flooding can reduce the value of your home or business premises and may make it more difficult and expensive to get insurance cover. A flood can threaten your safety, cause serious damage to your property and its contents, and will result in many months of dislocation and disruption. A flood can happen to any property, from one or more of these causes. For most property in the UK, the risk is still small. Some properties are more at risk than others due to their geographic location and particular local situation.
How will the flood risk affect the value and insurability of my property?
The value of a property at risk from flood is less than that of a similar property that isn’t at risk. Flood risk will affect the value for two reasons. First is the impact of a flood on the continued use of the premises, the health and safety of the occupants and any consequential damage and disruption. The second is obtaining building insurance cover for the property. If it is difficult to arrange cover it will affect the ability to arrange a mortgage for the property. As building insurance is so important in determining whether a property is mortgageable and therefore the market value of the property, owners and prospective purchasers are advised to verify this cover is provided and maintained by determining the property’s flood risk. The reduction in value may range from negligible to severe, depending on the particular circumstances of the property’s location, situation, type of construction, and flood defences, both to the geographic area and to the property in particular. The impact on value can be reduced by ensuring better flood resistance (flood defences) are in place and by increasing the flood resilience of the property and its contents – making the property construction and facilities less prone to damage by flood.