UK annual flooding losses set to reach £1 billion

UK annual flooding losses set to reach £1 billion

Research by property search firm Searchflow shows that the annual cost of flooding in England and Wales has reached £1 billion as a result of underinvestment in defences and climate change.
The cost of individual major flooding events is rising.  The Environment Agency states that a major coastal flooding event in the Humber estuary could cause damage of £266 million.  As climate change leads to a rise in the sea levels, the Association of British Insurers believes this could rise to £1.4 billion by 2040.
Predictions by the Environment Agency that sea levels will rise by 40 cm in the next 30 years would mean that the number of properties at significant risk of flooding in Eastern England would rise by 48%.  This would mean that the cost of a major coastal flood could reach £16 billion.
These high figures would put a heavy strain on the insurance market, with the Association of British Insurers estimating that the cost of a single flood event at £12 billion would require 10% of the capacity of the global reinsurance market.
Richard Hinton, business development director of Searchflow commented:
“The twin impacts of climate change and ongoing property development mean the danger of flood liability is growing rapidly. So great is the potential risk from rising sea levels and construction on the floodplain to accommodate a rising population, the UK’s flood liability could come to dominate the global reinsurance market. In practice, that would mean many in high risk areas would be unable to obtain insurance at all, which would significantly reduce the value of their properties and potentially could put homeowners in breach of their mortgage agreements.
“Many property owners don’t realise the extent of the danger they face. It’s no longer safe to assume that historically low flood risk is an indicator of what to expect in the future. Particularly in coastal areas and parts of the UK which face significant risks of flood damage, it’s essential those purchasing property are fully aware not just of the risks they face today, but of those that will develop in the coming years”.
Flood Defences
The UK currently spends £570 million per year on flood defences.  Research by Searchflow indicates that if the level of spending remains the same the annual cost of flooding could reach £13.5 billion a year.  The Environment Agency calculates that the spending on flood defences needs to be increased by £20 million a year to a least £1.04 billion annually by 2035.  
The Association of British Insurers estimates that the present level of spending on flood defences is insufficient.  43% of flood defences are in a ‘moderate, poor or very poor’ condition.  Flood defences represent good value for money, with the Environment Agency stating that for every £1 spent, the damage from flooding and coastal erosion drops by £8.  
Richard Hinton adds:
“With neither King Canute unavailable to push back the water, the UK is reliant on flood defences to protect the properties at risk of flooding. Although hundreds of millions per year sounds like big spending, it’s a drop in the ocean compared to the cost of the damage the UK faces from flooding. Every year the government fails to increase spending on protection from flooding condemns property owners to potentially catastrophic losses down the line. In the meantime, all property owners can do is ensure they have a full understanding of the risks they face”.
Regional Flood Risk
Research by Searchflow shows that of those regions with more than 10,000 properties at ‘significant’ risk of flooding, residents in the borough of Windsor and Maidenhead are the least well informed about flooding relative to the risk.  Over the UK, the proportion of buyers conducting flood searches varies from 2-22%.  In the SL postcode, which is one of the most at risk of flooding, only 6% of transactions involve a flood search.
Those local authorities with the highest number of properties at significant risk of flooding are Bristol, East Lindsey Borough, and Windsor and Maidenhead borough.  Kingston-upon-Hull and the East Riding of Yorkshire also have many properties at significant risk of flood. 
Richard Hinton comments:
“There are stark variations between different Local Authorities in terms of the seriousness with which conveyancers treat flood risk — and worryingly they don’t necessarily correspond to the level of risk the different areas face. Despite encompassing one of England’s three most at-risk areas, the SL postcode barely sees half the average number of flood searches across England. Homebuyers need to make sure their conveyancer checks thoroughly that they know the level of risk they face from flood so they can make their purchase with their eyes open”.
As climate change leads to an increased risk of flooding, it is a good idea for conveyancers to consider whether a flood search is appropriate. 
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SearchFlow

http://www.searchflow.co.uk

SearchFlow is the UK’s largest provider of legal due diligence data for residential and commercial property transactions. Since its formation, it has supported over 5,000,000 instructions and delivered 26,000,000 searches; this equates to around 1 in every 4 property transactions in the UK. SearchFlow recognises that proactively supporting each client’s journey is vital to delivering the right due diligence insights, searches, data, surveys, and insurance for every transaction – whether a single residential property or a complex commercial portfolio. Via its advanced online ordering platform and backed-up by an award-winning customer service team, SearchFlow supports clients in delivering the conveyancing solutions needed to manage due diligence risk and achieve compliance. By partnering with SearchFlow, property law professionals in the UK can deliver smarter, safer, and faster property transactions to their customers. SearchFlow have been crowned Search Provider of the Year for four consecutive years, and recently won Bronze for Best Use of Technology at the CX Awards. Based in Kent, SearchFlow is a Landmark Information Group business, which is part of DMGT plc. Key Services

Links Address 42 Kings Hill Avenue Kings Hill West Malling Kent ME19 4AJ Key Contact  Rob Steadman robert.steadman@searchflow.co.uk Telephone 0800 977 8818

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