The insurer’s claims director says the firm’s latest research highlights a ’concerning amount of current and future development in high flood risk areas’

LV= General Insurance (LV=GI) and think tank Localis is calling on the government to make planning policy changes to control the volume of new build developments in high flood risk areas.

The businesses have made a number of policy recommendations, urging that a long-term, holistic approach to flooding should be developed, with property developers, insurers and local authorities working together to tackle the issue of building on floodplains in order to protect consumers.

According to the duo’s latest report, Plain Dealing: Building Flood Resiliencepublished today (22 November 2021), more than 5,000 new homes have been approved to be built this year in areas of the highest risk of flooding. 

With climate change continuing and mounting pressure to build more homes across the UK, LV=GI is concerned this could leave millions of homeowners at risk of experiencing the trauma of a flooded home.

Martin Milliner, claims director at LV=GI, said: “Flooding is an extremely traumatic event which has a devastating impact on a person’s life, both physically and mentally.

“This research highlights a concerning amount of current and future development in high flood risk areas. To tackle this, we need to come together and develop a holistic approach to flooding for the long term, with property developers, insurers and government – both nationally and locally – tackling the issue of building on floodplains.”

This call for action aligns with the Environment Agency’s Flood Action Week, held between 22 to 28 November 2021.

Policy recommendations

A number of policy recommendations have been developed between Localis and LV=GI, including:

Planning reforms

  • Floodplain development should be avoided wherever possible and should be accompanied by appropriate flood defences, constructed alongside new developments where unavoidable.

Funding recommendations

  • Specific funding should be made available to establish a new cross-departmental task force to look at flood risk development. A new ministerial post, between the Department for Environment, Food and Rural Affairs (Defra) and the Department for Levelling Up, Housing and Communities (DLUHC), should be set up to oversee and provide accountability for this task force.

A future risk-based approach to development

  • The insurance industry should work with the government, local authorities, developers and other key stakeholders to help inform what measures might be needed in the future to help mitigate against climate change and ensure that homes remain insurable.

Communities at risk

New research conducted by LV=GI for the report revealed that almost 200 planning permissions have been granted for 5,283 new homes based in the highest flood risk local authorities in the country, with the majority (4,255) in areas pre-identified as highly likely to flood.

The most affected regions, according to the research, are Yorkshire and the Humber and the East Midlands, with nearly half of the approved homes situated on a major new development on a floodplain in North Lincolnshire.

The top five local authorities at risk of flooding are South Holland, Boston, Fenland, Runnymede and King’s Lynn and West Norfolk.

The research added that a third (31%) of approved planning permissions for new residential buildings on floodplains did not come with a flood risk assessment, which is a review of a development in its planning stage to assess the risk of flooding.

Milliner continued: “Climate change will increase the UK’s exposure to weather-related hazards such as flooding and it’s vital we prepare for this.

”Whilst we welcome the government’s commitment to increase housing, we have concerns about the UK’s resilience to future flood events and in particular the number of new housing developments in flood risk areas that are still receiving approval.

“With those involved in the planning process ignoring the current guidance, this runs the risk of putting an ever-increasing number of communities at risk.”

LV=GI’s report noted that nearly 20% of all properties across England - equating to 5.2 million people - are at risk of flooding. Around 2.4 million properties are built on floodplains.

In the last decade, floodplain development has increased by 12% due to the UK’s growing population and the overwhelming need for new homes.

The research predicted that England is likely to see properties built in areas of high risk of flooding almost double over the next 50 years, increasing from 2.4 million to 4.6 million.

Pricey repairs

Flood damage costs an estimated £1.1bn per year in England, according to non-profit organisation the Energy and Climate Intelligence Unit. 

According to LV=GI, the average cost of repairing a flood damaged home is approximately £32,000. The most common cause of flood damage this year has been due to drains unable to cope with the amount of surface water.

While some properties are protected by Flood Re, which is an agreement between the government and insurers to cover homes with significant flooding risk, the scheme does not include properties built since 2009.

LV gi flood-infographic

Source: LV=GI 

This cut-off point was initially introduced to act as a deterrent to developers building in flood risk areas - however, LV=GI’s findings suggest this has not worked, putting many new build homeowners at risk.

The report further found that 12% of local authorities strongly agree that they have the skills and expertise to understand flood risk when making planning decisions – both now and in the future.

Jonathan Werran, chief executive of Localis, added: “There is a clear need to reset government policy and regulation to prevent an otherwise unavoidable 50% uptick in the numbers of houses being built on floodplains over the next half century.

“At the same time, with climate change another unavoidable reality, we need to strengthen communities to become resilient in adapting to, living with and responding to flood pressures.”