High risk of flooding crippling value of many homes in North of England, HML finds
The “hidden cost” of flooding in the North of England has been uncovered by the UK’s leading third party mortgage administration provider, HML.
In a comparison of the category of risk of flooding assigned to each postcode by the Environment Agency and average house price sales in each area, HML found that the value of many homes in the North of England has been crippled by a high risk of flooding.
Its analysis found that properties classified as at high risk from flooding in the North West and Yorkshire and Humber regions of England increased in value half as fast between 2005 and 2014 than those at no flagged risk (17.04% compared to 8.58%).
Andrew Jones, Chief Executive Officer at HML, said: “A flood can devastate a community, but there is a huge hidden cost to those at high risk in much of the North of England.
“The high risk of flooding for some areas accentuates the regional disparity of property price changes, meaning other, safer areas, particularly Greater London, are seeing far greater increases than areas at risk.
“As well as the threat of damage and of course injury from floods, households at risk also therefore face a greater chance of falling into negative equity and reduced chances of sale.”
In Yorkshire and Humber, the difference was starkest, with the value of properties in high risk postcodes growing at 5.91% compared to 16.29% for no flagged risk.
In the North West region, the value of properties in high risk postcodes increased at 6.20% compared to 15.33% for no flagged risk.
By far the greatest rate of increase for property values was in Greater London, where the value of properties at no flagged risk of flooding have increased 90.71% during the same period – more than 10 times faster than the combined average for high risk properties across Yorkshire and Humber and the North West.
HML manages around £32 billion of assets across the UK and Ireland, and uses advanced analytical instruments and its knowledge of mortgages and property to develop a deep insight into understanding trends within the market.