UK Warned of Housing Market Risks as Flood Re’s Future Unclear

The UK government must provide clarity on the future of Flood Re or risk seeing its failure to do so feed through to the country’s housing market.

That’s according to the Climate Change Committee, a group created back in 2008 under an act of parliament with the goal of ensuring the UK is ready for the fallout from global warming.

“One of our top recommendations for government is to undertake a priority review of what is the future of flood reinsurance,” said Richard Millar, the CCC’s director of adaptation. There needs to be “a clear decision,” not just for the insurance industry, “but also crucially to those homeowners who might need it.”

Read more: UK Banks Slammed by Flood Re’s CEO for ‘Ignoring’ Mortgage Risks

Set up a decade ago to help vulnerable homeowners get affordable insurance, Flood Re is due to be wound down in 2039. At the same time, the risk of flood-related damage is growing. There are currently 6.3 million properties across England that are in areas at risk of flooding, a figure that’s set to rise significantly in the years ahead as the fallout from climate change intensifies, according to the government’s Environment Agency.

The 2039 end date for Flood Re “is already creating uncertainty in the property insurance market,” the CCC said. “It could start to have impacts on housing market decisions for properties that continue to be at flood risk.” The committee is calling for a review that will result in a “publicly announced decision” on the future of Flood Re within the next five years.

The recommendation is part of a long list of guidelines laid out by the CCC in a report published on Wednesday, in which it warned that floods, droughts and higher temperatures all pose a threat to Britain’s way of life.

Everything from national heritage properties, to the ability to hold cricket matches and conduct school lessons at acceptable temperatures will be affected, the committee said. Investments of around £11 billion ($14.7 billion) a year — split across public and private financing — are needed to protect the country, it estimates.

“Our way of life in Britain is at risk from the threat of the changing climate,” said Julia King, chair of the CCC’s adaptation committee. “There are proven technologies which are available now to help the UK adapt effectively. With the right decisions, we can protect the people and the places we love.”

Britain should prioritize cooling, spend more money on flood defenses and encourage private funding through subsidies and regulation, the committee said. King also highlighted the need for logistical changes, such as rearranging the school year so exams are conducted during cooler months rather than in the summer. And rules should be in place that ensure workers aren’t exposed to dangerously high temperatures, the committee said.

Parts of Britain will be beyond defending from climate change, according to the committee. In coastal areas, people may ultimately need to be relocated because it’s not practical to protect them from rising flood and erosion risks, Millar said.

“We can hold the line overall,” he said. But that doesn’t mean that “absolutely everywhere could be protected to the same standard as today.”

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