It was with an unfortunate irony that the government chose to announce its plans for a massive increase in house building on the nation’s flood plains as large swaths of the country were dealing with the aftermath of some of the worst Summer flooding seen in the UK.
While not all of the promised three million new homes were planned for these natural flood defences, the fact that Housing Minister, Yvette Cooper, admitted these areas couldn’t be ruled out for development at a time when people in Gloucestershire were told they’d be without drinking water for around two weeks and thousands more in Yorkshire and the Humber were still unable to move back into their properties after devastating flooding at the end of June.
But while those affected were still trying to deal with the immediate consequences, those within the housing sector were already looking at the long-term impact on the housing stock, prices and insurance. While disasters of this magnitude often focus the public mind on problems which have been forecast, will the events of the last month mark a turning-point in how this country sees and deals with flooding?
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Mixed views
In the eyes of estate agents, there seems to be a mixed view as to how flooding effects the buyer’s mindset. For David Pank, sales and marketing director at Manning Stainton, it takes regular flooding to start to have an impact on prices.
“The Wyke Beck in East Leeds flooded again for, I believe, the third time in five years. Unless further emergency works are undertaken by the National Rivers Authority, homes in the affected areas are certainly likely to be affected both in terms of saleability and value. However, approximately seven years ago, a number of properties were flooded when the River Aire burst its banks at Apperley Bridge. In subsequent years properties in the area continued to sell rapidly and remain popular, with prices unaffected.”
However, the floods of the last month have come at a time when green issues have never been more important in the public conscience. There has been a tendency for buyers to stick their heads in the sand, seeing riverside property for its beautiful views, rather than its risk of flooding. But with all the talk about climate change and rising sea levels making the UK more prone to flooding, the impact on pricing in high risk areas could be more pronounced than before. These floods may have literally washed away old attitudes.
Becoming wary
Within the insurance sector, there has certainly been a change in the last couple of years as firms have already started to become wary of what property they put their money behind. As Stephen Foden, CEO of Spring Move, admits:
“Flooding will come to the fore in the coming years and while insurance companies are not too worried about flash floods, they are looking seriously at which areas flood easily. While they have to back up a policy taken out on a house, they can refuse to offer insurance on new property, which would be a problem.”
Henry Pryor, founder of Primemove.com, agrees: “Four years ago, insurers threatened to withdraw cover from some Fenland properties which some feared would make them unsaleable. The cost of the 2007 floods could well cause insurance firms to look again at the risk they are writing and anyone left without cover could see a reduction in the value of their home of up to 25 per cent.”
So if insurance companies are going to withhold cover from properties at high risk of flooding, how can the government go ahead with a massive new programme of building on the nation’s flood plains? The impact on pricing, as Pryor argues, must be dramatic because while many potential buyers are desperate to get onto the ladder, they aren’t going to be too keen if they have to experience the misery of flooding every year.
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However, Clive Kornitzer, chief operating officer at Abbey for Intermediaries, believes demand will see these properties occupied. “The recent floods won’t stop people buying on flood plains as if the demand is there then people will fill these homes. The question though, if you’re building on a flood plain, is what action are developers going to take? They have to ask themselves whether there are things which can be done to make our developments more environmentally secure. If we are going to build on flood plains, we need to be aware of the consequences and deal with them where possible.”
Indicative of the problem
However, the simple fact that we are having this argument over whether building on flood plains is right, is indicative of the problem facing the UK industry. As an island nation, and a small one at that, there is only so much land to build on. The mentality running through our heads that our ‘green and pleasant land’ needs to be protected at all costs means we are restricting ourselves to limited spaces for development. This is why there is such an emphasis on brownfield sites and flood plains within government policy – these are the few remaining areas left open to them.
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Therefore, if we are to restrict ourselves to such sites for development, we will have to come to terms with the fact that flooding will become a regular theme and the images on television screens over the last month will be a much more common occurrence. Otherwise, the countryside may have to be sacrificed if we are going to get on top of the extortionate house prices which are keeping people off the housing ladder.
