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How the Latest UK Flooding May Affect the Housing Market in 2016?

Published on January 11, 2016 by Aude Seynt Martin in News, Property Investment

UK flooding effects on housing market


Winter 2015 saw the worst floods the UK has seen in decades. As numerous storms tore through the country, thousands of homes were evacuated as they suffered significant damage. Not only have these floods in the UK devastated families, it has also left many homeowners worried about the effect it will have on the value of their property. So what exactly will the effects of 2015 flooding have on the housing market?

Understanding the worst hit areas

The floods started on the 5th December as Storm Desmond made its way through the UK. It broke the UK’s 24-hour rainfall record and caused chaos throughout the country from Wales to Cumbria and even parts of Scotland. Storm Eva followed later on December 24th but largely brought heavy winds due to low pressure.

It was On Christmas Day and Boxing Day when the real devastation occurred. Lancashire was given seven serious flood warnings by the Environmental Agency, whilst Yorkshire received 21 severe warnings. On December 26th, all of the rivers in Lancashire were peaked at their highest levels on record, whilst numerous rivers broke their banks.

Flood-hit areas unlikely to recover in 2016

In the past, flood-hit areas have suffered an initial drop in house prices, but after a few years the prices have recovered back to normal. However, according to estate agents situated around the most recent flood-hit areas, this is unlikely going to be the case for those affected by the 2015 floods.

After the last major floods in Gloucestershire and Tewkesbury 2007 and Cockermouth in Cumbria 2009, the recovery was largely down to additional flood defences being introduced. People believed such devastation wouldn’t occur again. Now, six years on that belief has been well and truly squashed with many left angry by the ineffective flood barriers.

House prices drop by up to 60%

The effects of flooding in the UK this time around have caused a huge drop in house prices. Homes in affected areas are now selling for up to 60% less than they were in November 2015. With estate agents doubting the market will recover in Northern England, it has understandably left homeowners worried about whether they will be able to sell their property. Of course, if the price is low enough there will always be a buyer; especially in the more sought after holiday areas. However, the UK property market is certainly going to face a significant challenge as it tries to recover from the devastation caused.

Help for those affected has arrived in the form of council tax relief. This means anybody who has had to leave their homes won’t have to pay council tax. David Cameron has also addressed concerns about the decrease in property value caused by the floods. Properties affected will be exempt from paying Stamp Duty Land Tax for the next five years. This should attract more property buyers and the money that would have been used to pay the stamp duty could be used to improve flood defences around the properties instead.

Landlords are also facing problems as the tenants who need to move out because of damage obviously won’t want to be paying rent. However, legally landlords can still request the rent is continually paid in a flooded home. It is down to their discretion whether they offer a discount or even a suspension on payments until the damage is cleared up. If the landlord does expect payments to continue to be made, there’s a risk that tenants will look for alternative accommodation and end their rental agreement. This would then leave the landlord in a bad position as finding somebody else to rent the house too after it has been flooded will be extremely difficult.

There’s also been confusion as to whether the landlord should pay for alternative accommodation for the tenant. Most private landlords aren’t responsible for putting their tenants up elsewhere, but they may have insurance that covers the cost. Landlords should also find that their buildings insurance covers the cost of any repairs that need to be made. However, this only covers structural damage. The contents of the home are typically the tenant’s responsibility. – Housing help if your home is flooded

So not only has the flooding crisis caused house prices to drop, it has also caused havoc for the rental sector. There will be many tenants who no longer wish to live in a flood-prone area, leaving landlords with the difficult task of renting the property out again.

What can homeowners do to protect themselves against flooding?

Personal Flood PlanIf you’re worried about flooding, there are things you can do to prepare for the worst case scenario. Firstly, it helps to determine whether you live in a flood prone area. If you do, a flood plan would be a very useful thing to have. This includes how you will handle the situation and emergency contact numbers. The Government website has an excellent downloadable plan that you can download here.

Being insured is an absolute must if you do live in a flood prone area. After the recent floods, it will more than likely effect the cost of insurance due to insurers having to pay out significant amounts to those affected. However, if you are unlucky enough to be hit by flood damage, the insurance will provide substantial relief.

Overall the latest floods to hit the UK are already affecting the housing market. Whether these effects are long-term remains to be seen. The country has recovered after previous severe flooding, but this time around a lot needs to be done in order to improve the flood defences. That is the only way the market will truly recover.

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Shared Equity Ownership: How to Buy a Luxury Holiday Home On a Budget
How Buy-to-Let Landlords Flood London Property Market
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About the author
Aude Seynt MartinAude Seynt Martin is an ex French corporate lawyer with a Master Phil in Property Law. When she came to London, Aude gave up her career as a Lawyer to be involved in property. Having studied the market for more than two years and worked with very experienced landlords and professionals, Aude is now a Property Consultant, whose motivation is to come up with creative solutions to help overcome any property related situation.

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