House Prices and Flooding

The recent floods in England have been the worst in living memory. Last month, the worst effected areas have been in South Yorkshire and Hull. More recently the floods have hit the south West. Towns near the River Severn, such as Gloucester, Tewkesbury and Cheltenham have also seen devastating floods. Rising river levels along the Thames have also caused flood waters in towns such as Oxford, Abingdon and Reading.
The flood waters are no discriminator between rich and poor; Even sandbags have proved ineffective in stopping flood waters enter into many houses.

The economic Costs of Flooding include:

• Damage to Property, loss of white goods, carpets e.t.c
• Cost to UK insurance firms. This will necessitate rising insurance premiums in the future.
• Future cost of improving flood defences
• Fall in value of Houses affected.

Many houses built on flood plains are now uninsurable. This means the risk is so high that insurance companies will not take the risk on. Therefore, this reduces the value of houses in these areas. Furthermore, the recent floods have increased the number of areas, categorised as “at serious risk of flooding”

If these floods were a once in a 60 year experience, the cost would not be so disastrous. However, there is increasing evidence that such floods may become a much more common experience.

Global Warming and Flooding

The reason for the excessive flooding in this summer of 2007, is that the jet stream has consistently been sending weather fronts from the Atlantic to the British Isles, usually these weather systems pass to the north of the British Isles. However, this year, partly because of rising global temperatures, they have been stuck over the UK, whilst central Europe has suffered from another heat wave.

Flooding and House Prices.

The effect of the flooding is to significantly reduce the value of houses in dangerous areas. It is possible flood defences will improve, but it is also possible that flooding will become more common and more serious. Also, if river levels rise too much, there is little flood defences can do. The effect on house prices will be highly localised, and will particularly effect those near rivers. However, the effect will also spread to other parts of the country, even if they were unaffected this year. Proximity to rivers will become a key factor in determining future house prices. Given the likelyhood of rising river levels, purchasing a house in an area at risk cannot seen to be a good investment.

Are you prepared for flooding? at BBC