Nationwide Building Society, the UK's second largest mortgage provider, has stopped lending on some properties deemed to be at a high risk of flooding. While concerning, this development is not entirely unexpected to ‘Flood Mary’, Mary Long-Dhonau OBE, who has long warned that the ramifications of flood risk would extend beyond the immediate impact of inundation. Long-Dhonau claims what we are witnessing here is the tip of the iceberg.

York Floods from Stock Photo and Image Portfolio by PhilMacDPhoto | Shutterstock

Only recently, I was made aware of homeowners being hit with mortgage rate hikes when renewing, due to the perceived flood risk of their home. In one case, the lowest rate they could find was 10.5% (compared to a previous rate of 4.7%). And now we are seeing lenders opting to move away from some vulnerable properties.

We all know that Flood Re is only a temporary sticking plaster, which came about to support those at risk, who prior to its inception in 2016 were really struggling to both find or afford flood insurance. It is a lifeline for those in flood-prone areas, providing access to affordable flood insurance. Its continuation is essential to prevent properties from becoming uninsurable and, consequently, unmortgageable.

But with only 15 years left to run, is it losing its effectiveness? Generally, the lifetime of a mortgage is around 30 years and banks are now looking into the future and realising that post-2039, flood insurance may not be widely available. After all, no flood insurance for a property means no mortgage for that property.

Add to that, if people do flood and have to fund the repairs, they run the risk of defaulting on their mortgage repayments, so banks, are of course financially planning for a future when Flood Re is no longer here.

To me, it feels as though this new situation is kicking people when they are down: many homeowners who flooded over winter are still not back in their homes while insurance claims and repairs are completed, and the cost of living continues to bite. Hearing this latest news may be a cause for further alarm.

Data from the Office for National Statistics (ONS) confirms that 28% of homes in England are mortgaged. If you then consider that approximately 5.7 million homes are at risk of flooding, the scale of potential displacement and financial strain could be wide reaching.

The existence of Flood Re is crucial in ensuring homeowners can continue to access appropriate flood insurances. It is enshrined in law that Flood Re, as it stands, has to exit the market in 2039 so time is pressing.

In 2022, Flood Re launched its Build Back Better scheme, which financially supports newly flooded people with up to £10,000 on top of an insurance claim. This can be used on property flood resilience measures to help make their homes recover more quickly from a flood in the future. Policy holders can install flood barriers, self-closing airbricks, flood doors etc or use materials such as plastic flooding, waterproof plaster, and raise plug sockets.

Ideally when a flood comes in the future, having incorporated recoverable repairs, it should either significantly reduce any insurance claim or, the best-case scenario, there’ll be no claim at all.

The hope is that once Flood Re exits the market, people will be able to access flood insurance through a risk-reflective priced market, however I have doubts that this will happen in reality. Particularly when you take into account the increasing effects of climate change (which are biting us sooner than many expected) and more regular occurrences of flooding (including in places that haven’t seen floods before).

Time Is Of The Essence

It is important that we plan now for a Flood Re ‘v2’. As an industry, we must also expedite the development and implementation of Flood Performance Certificates to empower individuals to manage their flood risk, using Property Flood Resilience measures (which a ‘Flood Re v2’ could potentially factor into its eligibility criteria).

The latest decision by Nationwide has far-reaching implications. It not only exacerbates the financial burden on homeowners already grappling with the aftermath of floods but also threatens to disrupt the housing market at large.

If this trend persists, mortgages for those at flood risk could become unaffordable, stifling homeownership opportunities and further exacerbating inequality.

We must act decisively to address this issue. From the Government’s perspective, an increase in flood defence budgets is drastically needed for both new and to maintain existing infrastructure.

From the industry’s perspective, time is running out and we must rally together to consider all options to help make our communities far more flood resilient for the future. We cannot allow those facing ever-increasing risk to be left stranded, in deep water without a paddle.

The Winter Floods of 23/24

This winter has been brutal, with 11 named storms wreaking havoc on so many people. With seemingly endless rain, the ground has become beyond saturated like an overfull sponge. Rivers and their tributaries have filled quicker than normal and the runoff from fields increased exponentially.

I have spoken directly with those who have personally faced floods first hand. This has included travelling with the Floodmobile into recently flooded communities (including a week in Scotland) to offer help and support to those affected. This has been a truly humbling experience!

Many visitors told me that the Environment Agency “sent too many flood warnings”, when a flood didn’t actually happen, so they stopped trusting them. (Time for a review EA!) However, I do think we need to improve our messaging to encourage more people to understand their risk and prepare. Preparation is so important, as it can reduce so much heartache.

On one memorable occasion, I held the hand of a gentleman in his late 80’s, the flood had hit when he was away staying with his daughter. He lived in a bungalow and his exact words were, “It’ll be easy to clear us out when we die, as we have lost every possession we own. Every memory of our long lives washed away, it’s as if we never existed.”

He also told me, like many people, that he was afraid to go back home and would rather he didn’t. The floods arrived fast and furiously. I saw videos of the deep, fast flowing water coming towards people’s homes at a frightening rate. On one video I saw how the water had torn down a nearby field, and its power had left a huge crater where the field had been, and the contents were deposited in some poor person’s home.

Another man was rescued by a helicopter from the roof of his home. In rural locations water has come from multiple sources, however one thing all visitors to the Floodmobile agreed that this is climate change in action.

I’m known for saying that flood risk management is like a jigsaw of many pieces, all working together to reduce flood risk, but with the sheer volume of rain that we saw this winter, (which we all know will worsen) I don’t think anyone can stop it, especially for remote, rural locations.

Without exception, I was told that the recovery from the floods was worse than the flood itself. I have been saying this for years and still things don’t improve. People who are newly flooded are traumatised and need gentle empathy, with the consistency of the same person looking after their claim, from start to finish. Even simple things such as an out of office response to emails, promising a reply would make a difference (waiting for three weeks for a response is not acceptable!).

Many told me they feel like a ‘claims number,’ not a person. Whilst I appreciate that the insurance industry is overwhelmed after a ‘surge’ event, common courtesy and compassion go a long way.

And another important point to note is not to take it for granted that everyone has the internet. That is absolutely not the case! So many older people have told me they don’t have the internet and certainly didn’t know where to start when asked to ‘upload a photo’. Inclusivity is key, and we must ensure multiple methods of support are provided to those facing these dreadful days of recovery.

When I watched the floods unfold on the TV, and having spoken with so many people firsthand, I have been astonished as just how many people were totally unprepared.

Education remains key in helping people to understand that measures are available to help keep their homes dryer for longer.

Author: Mary Long-Dhonau OBE

Long-Dhonau is an advocate for people preparing for a flood, having been flooded multiple times herself. She is a property flood resilience champion and consultant for the RAIN project in Northamptonshire.

www.floodmary.com