The answer to this question is yes, in a number of ways. The recent Floods have had a devastating impact not only on people’s lives and homes but they will also affect the country’s real estate market. In the UK, this winter has been one where floods have had an enormous effect on a number of homes, it has been officially declared as the wettest winter on record.
We have all sat and watched the news, tried to help those in need, but the ones amongst us who aren’t affected will not truly feel the ultimate loss or financial repercussions ‘an act of god’ has on those who are living through this turmoil.
In the UK, there has been immense pressure on the government to drastically improve the country’s flood defences to protect our homes, this has forced Prime Minister David Cameron to announce, that anyone who is forced to leave their home due to flooding will be exempt from paying council tax.
But what does it mean for the value of those homes that have now been ‘blacklisted’ in effect as being built within a flood stricken area? Politicians and property experts have discussed in length what needs to happen to stop the housing market from falling, due to flooding. One idea is to make the houses affected exempt from Stamp Duty Land Tax if they are to be put on the market in the next five years.
One of the main concerns of property owners, is how the floods will have impacted the value and chances of selling their homes in the future. An exemption from Stamp Duty Land Tax to these properties will not only help attract buyers to the properties in these areas, but will also provide funds to the new owners to enhance flood defences around the property.
Housing development companies and architects are also being urged to pay more attention to the hazards of potential flooding. It is usually a planning requirement for housing developers to locate all habitable rooms in a new build on a flood plain on the upper floors. The ground floor is then set aside for storage, utility rooms or a garage. Still not particularly appealing for potential buyers who could risk damage to their cars and personal property they may wish to store in these areas.
The risks of flooding do not need to have a major impact on the UK property market, some critics believe that there is limited evidence to suggest that flood risks negatively affect house prices and demand. This is mainly derived from the opinion that property adjacent to waterways, the sea or rivers normally attract a premium price.
The main approach to flooding has been to build and defend, between 2001 and 2011 around 200,000 homes have been built on flood plains. More developments in flood affected areas, such as Chertsey in Surrey need to feature new building methods and technology to make them flood resilient, not all do and many are slipping under the radar because of local councils failing to inform the environment agency that their objections have clearly been overruled, and the development has been given the green light to go ahead.
This topic is going to remain prominent for some time, both in parliament and across the media, as many people are trying to rebuild what they have lost during the winter floods, but what also remains clear is that the UK do not want to hinder the small improvement made within the property market this far from the recent recession.