New homes being constructed in flood-risk areas across England could become uninsurable within decades, according to Amanda Blanc, chief executive of Aviva, Britain’s largest insurer.
Speaking to the BBC’s Big Boss Interview podcast, Blanc stated that the flooding threat was “absolutely increasing” and warned that England was “for sure” building properties that might become uninsurable in the future.
Approximately 115,000 homes are projected to be built in flood zones over the next decade if current construction patterns continue. “That doesn’t seem to me to make sense. We need to think about where those homes are being built,” Blanc said.
Scale of flood risk
According to the Environment Agency, around 6.3 million homes and businesses in England currently face flood risk. This figure could rise to approximately 8 million properties, or one in four, by mid-century as climate change intensifies, the agency warned in August.
Research conducted by Aviva indicates that nearly a third of new homes built in 2024 will be at risk of some flooding by 2050, with one in seven facing medium-to-high flood risk. The Met Office has estimated that the type of wet and stormy winter experienced in the UK during 2023-24 has shifted from a once-in-80-year event to a once-in-20-year occurrence.
Blanc noted that mitigation measures could reduce vulnerability, stating: “You can do all sorts of different things to your property to make it more or less vulnerable to flood.” However, she emphasised the need for careful consideration of building locations, as flood-prone areas are well documented.
Budget concerns
Blanc also addressed concerns ahead of the 28 October budget, calling on the government to avoid policy “kite flying” that could trigger market disruption. As a major private pension provider, Aviva has observed significant impacts from budget speculation, particularly regarding pension policy changes.
The insurer recorded withdrawal rates 30 times higher than normal in the run-up to previous budgets, as savers rushed to access tax-free lump sums amid uncertainty. “Clearly something which customers may regret afterwards because once you take your tax-free lump sum out, you can’t put it back in,” Blanc said.
The warning comes as the UK property market faces multiple pressures, with concerns about insurability adding another dimension to housing affordability and availability challenges. The comments also raise questions about planning policy at a time when property values in some markets have come under pressure.
The insurance industry’s stance on flood-risk construction could have significant implications for developers, local authorities, and homebuyers, potentially affecting property values and marketability in identified flood zones across England.
