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Flood Re scheme not enough, says research

Two leading research bodies have criticised the government’s proposed new Flood Re insurance scheme on the grounds that it does not take fully into account the impact of climate change on the increasing flood risk to homes in the UK.

According to a report by the Centre for Climate Change Economics and Policy and the Grantham Research Institute the government scheme, now out for consultation, has not “taken into account adequately, if at all, how flood risk is being affected by climate change”.

Under current proposals, the Flood Re scheme would provide cover for homes at risk of flooding by introducing a £10.50 levy on all residential policies from 2015.  This would raise funds of £180m each year to cover the cost of flood damage to high risk properties.

However, the new report warns that the Association of British Insurers and the government may not have future-proofed the scheme well enough. The research warns that the number of homes that will fall into the ‘high risk’ category in future is being underestimated and therefore the funds raised from unaffected homeowners will not be enough to provide continuing cover.

The UK Climate Change Risk Assessment, published by the Government in January 2012, estimated the number of homes at significant risk of flooding could increase from 370,000 in 2008 to between 450,000 and 800,000 by the 2020s (assuming no new buildings), and between 500,000 and 1.5 million by the 2050s. However, the research believes these figures are inaccurate, saying “the number of properties in future that will be at moderate and high probability of flooding has been significantly underestimated.”

For more information or to download a copy of the research, go to: or
For more information on flood re scheme not enough, contact Robert Burke, Director at Watts Group PLC, on 020 280 8138.

The Watts Bulletin is the technical companion to the Watts Pocket Handbook, the essential guide to property and construction, as used by professionals since 1983.

Watts Bulletin editor: Trevor Rushton.