Flooding and subsidence could cut London property values by up to 31%, study warns
According to research from PriceHubble and MIAC Analytics, 6.8% of UK properties are currently in high flood-risk categories, a figure that could rise to 9.6% under a high-emissions climate scenario.
Climate risks such as flooding and subsidence could significantly reduce property values across the UK, with some homes in London potentially losing nearly a third of their value, according to research from PriceHubble and MIAC Analytics.
The study highlighted the growing financial impact of climate change on the housing market, warning that risks are already affecting property prices, insurance costs and mortgage lending decisions.
Researchers estimated that 6.8% of UK properties are currently in high flood-risk categories, a figure that could rise to 9.6% under a high-emissions climate scenario.
Meanwhile, the risk of subsidence was projected to increase sharply.
By the 2050s, around 21% of UK homes could face high subsidence risk, compared with just 4% today.
The analysis revealed that climate risk is already influencing property prices.
Homes located in the highest flood-risk categories are typically selling for between 2% and 6% below local market values, with the biggest impacts seen in lower-value markets and among terraced housing.
Subsidence risk is also increasing in parts of southern England, particularly in Essex, the East of England and Greater London.
In the Essex district of Castle Point, 82% of property transactions in 2024 occurred in areas classified as the highest subsidence risk category.
Mark Cunningham, managing director of PriceHubble UK, said: “These are not abstract risks anymore. Localised analysis shows that some areas are already experiencing concentrated exposure that national averages simply mask.”
The research also identified a growing mismatch between property values and rebuilding costs in flood-prone areas.
In some lower-value markets exposed to flooding, the cost of rebuilding a property could exceed its market value by up to 56%.
Subsidence presents a different type of challenge, the report noted, as it develops more slowly but threatens long-term structural resilience, particularly in areas with clay-rich soils that are vulnerable to heat and drought.
Using portfolio-level modelling, MIAC Analytics assessed how climate risks could affect property values under different climate scenarios.
The analysis examined a £330m lifetime mortgage portfolio, finding that incorporating detailed property-level climate data significantly increased the scale of potential losses.
Under a scenario in which no additional climate mitigation action is taken, the modelling suggested that property values in London could fall by as much as 30.9% when micro-level climate risks are factored in.
Across the UK, incorporating property-specific climate data reduced projected property values by an average of 21.6%.
Darrel Welch, managing director of MIAC Analytics, said: “As climate risk intensifies, institutions can no longer rely on coarse assumptions or regional averages.
“Integrating granular climate analytics into valuation and portfolio modelling is now essential for understanding the true exposure.”
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