One in six properties in England will be at risk of flooding by 2050

This report, compiled by Alexandros Skouralis and Nicole Lux, researchers at the Bayes Business School, reveals that residential properties subject to flood risk sell on average at a price 8,14% lower than that of non-residential properties. affected, a rate of up to 32,2% for the most exposed properties.

Based on a unique set of property price data provided by Rightmove, the UK's leading property listing site, this report analyzes 4,8 million listings and 3,2 million transactions completed between 2006 and 2022.

A score to assess the risk of flooding at the level of each individual property has been provided by Twinn, of Royal HaskoningDHV, which takes into account the risk of flooding from river, rain and sea sources. This score is based on advanced flood modeling techniques and incorporates the most recent hydrological data from the Center of Ecology & Hydrology. This model is also used by major insurance companies.

The main conclusions of this report are as follows:

• The properties most at risk of flooding are located in the regions of East England, Yorkshire and the Humber and North West England, where the risk of flooding is generally 10 to 12%.
• Semi-detached and terraced properties (with a 9% flood risk) are more vulnerable to flooding because prevention measures, such as replacing windows, doors, air vents and drains, are only effective. if they are applied collectively, unlike individual houses for which the risk of flooding is only 7%.
• The overall flood risk is expected to increase for 73% of affected properties by 2080, and the likelihood of flooding is expected to increase another 8%. A low-risk property, with a flood probability of less than 20% and subject to flooding, would sell for a sale price 9,6 to 13,6% lower.
• The value of the most accessible properties is likely to be more affected by the risk of flooding than that of the most expensive properties.

This report highlights the effects of climate change and the increased frequency of natural disasters on the residential real estate sector.

For Ed Burgess, Strategic Head of Data Services at Rightmove: “We are pioneers in data innovation in the field of the environment. As the UK's leading property listings site, we are uniquely positioned to help businesses and organizations better understand how climate factors could affect the real estate industry now and in the future. Although flood risk is already taken into account in the valuation of a property before it is put on the market, our analysis shows that this risk will play a significant role in the valuation of real estate by 2050, and that it is likely to be at the top of the list of concerns for future buyers. »

For Nicole Lux, senior research fellow at Bayes Business School, who points out that these results should be a wake-up call for the development of risk protection programs: “In this empirical study, we measured the impact of flood risk on the valuation of real estate. With sea levels and the unpredictability of the climate set to rise in the coming years, this poses a major threat to residential real estate, especially in low-income neighborhoods. The impact of flood risk on low-income neighborhoods is an aspect to consider in the National Environmental Agency's Flood Risk Management Plans (FRMP) programmes. The main market players, such as buyers of real estate, insurance companies, etc. have already factored flood risk into all of their property sales and appraisals. The Research Center wishes to extend its work to other European countries subject to a risk of flooding. Our team intends to build strong data partnerships, like Rightmove, with France, Germany and Spain. »

To read the full report in PDF: “The impact of flood risk on the property sector in England. »