The impact of flood risk on mortgage approvals

The last 18 months have been the wettest on record, with April seeing 55% more rainfall than usual.  

A total of 11 storms hit the UK in the 23/24 storm season which resulted in hundreds of flood warnings across the UK and many houses left flooded. As a result of this, and the increasing threat of climate change,  Nationwide, one of the UK’s largest mortgage lenders, has recently announced that they will no longer approve mortgages for properties deemed to be at significant risk of flooding, with warnings that other banks may follow suit.  

This announcement comes as worry over climate change and its impact on house prices is growing. It also reflects a trend within banking, conveyancing and insurance, where these sectors are beginning to reassess their exposure to climate-related risks. While Nationwide's decision is aimed at mitigating its own risks, it also has significant implications for the conveyancing industry and homebuyers. Conveyancers will now have to navigate additional complexities when acting on property transactions involving flood-risk properties, potentially leading to delays and increased costs for both buyers and sellers. Ensuring everyone within the property purchasing chain does their due diligence is crucial for the survival of the housing industry.

This might spark concern for homebuyers, as well as solicitors, as it introduces a new layer of stress and uncertainty into the already long and complicated process. Prospective buyers may find it more challenging to secure a mortgage for properties located in flood-prone areas, potentially forcing them to reconsider their purchasing decisions. Existing homeowners in affected areas may face difficulties when trying to sell their properties. Ultimately, Nationwide's move highlights the effect of climate change on the conveyancing industry.

So what can you do to give your clients peace of mind and ensure you are doing your due diligence to mitigate flood risk? The simplest thing you can do is make sure you include a Flood report in your search pack. It is vital to understand the level of flood risk on a property as this affects the cost of a property's building insurance. Flooding also isn’t just restricted to those properties located close to a river or the sea, so a flood report is essential before deciding to go ahead with a property purchase. We offer a range of reports to choose from.

Combined reports such as Groundsure Avista and Landmark Riskview Residential are comprehensive environmental reports that provide a full picture of the environmental risks, including contaminated land, flood risk, ground stability, planning and more. Alternatively, you could opt for a specific Flood Risk report, such as Landmark Flood or Groundsure Flood, that provide in-depth and clear analysis of any potential flood risk.  

If you would like to find out more about mitigating flood risks in conveyancing transactions, you can watch our recent flood risk webinar in partnership with Landmark Information Group. Or, if you have any questions about which report you should be choosing to ensure you are doing your due diligence, get in touch with our friendly Account Managers on sales.team@geodesys.com.