A brand new report from Bayes Enterprise Faculty (previously Cass) reveals how flood danger impacts 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 susceptible to flooding are offered at 8.14% decrease on common in comparison with non-affected properties, which reaches as excessive as 32.2% for the very best danger properties.
Utilizing a novel 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 befell between 2006 and 2022.
For all properties, a property-level flood rating was offered by Twinn by Royal HaskoningDHV that considers danger from fluvial, pluvial and tidal sources. It makes use of superior flood-modelling strategies and incorporates probably 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 danger of flooding are primarily based in East of England, Yorkshire and the Humber and the North West, which usually have flood danger likelihood of between 10% and 12%.
- Semi-detached and terraced properties (9% flood danger likelihood) are extra susceptible to flooding since prevention measures – resembling improved home windows, doorways, vents and pipes will solely be efficient along with neighbours versus indifferent homes with solely a 7% flood danger likelihood.
- General flood danger is predicted to extend for 73% of affected properties by 2080, whereas the likelihood of flooding is ready to extend by an extra 8%. A low-risk property, with a likelihood of flooding beneath 20%, that’s affected by a flood occasion is predicted to be offered at a lower cost of between 9.6% and 13.6%.
- The worth of decrease priced properties is prone to be extra affected by flood danger 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 Companies at Rightmove, commented:
“We’ve been on the forefront of information 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 danger is basically factored right into a valuation on the property advertising and marketing stage, the evaluation reveals the way it will play a extra vital function in property valuations by 2050, and is prone to stand up the listing of home-mover considerations.”
Dr Nicole Lux, Senior Analysis Fellow at Bayes Enterprise Faculty, stated the findings must be a wake-up name for danger safety programmes.
“On this empirical examine we quantify the impression that the danger of flooding has on property valuations,” she stated.
“With sea ranges and unpredictability of local weather set to rise in years to return, this poses an important menace to properties and the housing market – notably in low-income neighbourhoods.
“Flood danger impression on low-income neighbourhoods is one thing nationwide programmes from the Environmental Company’s flood danger administration plans (FRMPs) ought to keep in mind.
“In any case, market individuals resembling property consumers, insurance coverage corporations and so forth have already accounted for the flood danger in all their underwriting and pricing.”