Thanks to our historically temperate climate, British homeowners, aside from an unlucky minority, have been insulated from the impact of extreme weather events. This no longer holds true.
Human-made climate change, combined with an El Niño weather event, has led to an unprecedentedly hot and dry summer. On 10 August, the National Drought Group declared that nearly three-quarters of the country was in drought. Meanwhile, wildfires have devastated Stourbridge in the West Midlands, Dunwich Heath in Suffolk and the Cairngorms in Scotland.
Homeowners are facing up to this new reality. Research from the UK Sustainable Investment and Finance Association (UKSIF) found that 33 per cent of homeowners are concerned that the increasing risk of fires, overheating and subsidence could impact house prices.
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Currently, most home insurance covers fire damage, including damage caused by wildfires, says the Association of British Insurers (ABI). Insurers are becoming more alert to the issue, however.
Caroline Elliott-Grey, senior product manager, UK and Ireland insurance at LexisNexis Risk Solutions, says: “Understanding the risk of wildfires spreading to homes and commercial properties has become almost as important as understanding flood or subsidence risk for property insurance providers.”
As a result, insurers will increasingly need to incorporate wildfire risk assessments for individual properties when producing insurance quotes, she adds.
Homes situated on the ‘rural-urban interface’, where town and countryside meet, are particularly at risk. This is due to the high density of flammable vegetation combined with concentrated human activity.
Research from LexisNexis Risk Solutions found that the top hotspots for urban wildfire detections in 2025 were London, Cumbernauld and the Croy/Bonnybridge area, Crawley, Poole and Bournemouth, and Swansea.
Hotter, drier conditions are also increasing subsidence, according to the British Geological Survey (BGS). Dataset forecasts from the BGS predict that if emissions continue on their current trajectory, more than 1.8mn homes could be impacted by subsidence by 2070. North and central London and Kent are particularly at risk due to the soil types in those areas.
While our summers are becoming drier, the UK’s flood risk, from both rising sea levels and surface flooding, is increasing. By 2050, the owners of 430,000 UK homes could become ‘climate mortgage prisoners’ due to flooding risk, predict UKSIF and policy and research consultancy Public First.
This is because flooding risk will prevent homeowners from being able to obtain affordable insurance, limiting their mortgage options and potentially making it impossible to borrow against these properties at all. At the same time, homeowners may find they need to carry out extensive and expensive renovations to cope with the changing climate. Public First’s research predicts that property prices in the most affected region could fall by more than 20 per cent as a result.
Again, the risk varies by location. Boston and Skegness in Lincolnshire risk becoming the “climate mortgage prisoner capital of England” as 8,600 homes are predicted to be at high risk of flooding by 2050, the report says. Thurrock, Goole and Pocklington, South Basildon and East Thurrock, Bootle, Sefton Central, Louth and Horncastle, Southport, Hastings and Rye, and Rayleigh and Wickford are also likely to be badly affected.
Due to its diverse coastline, the UK is finding it difficult to devise a coherent shoreline management plan to deal with erosion and coastal flooding. However, for British homeowners in high-risk areas, time is running out.
