Climate Change Could Make UK Homes Uninsurable, Warns Expert
Richard Murphy, an Emeritus Professor at Sheffield University Management School, has raised alarms about the potential for homes in the UK to become uninsurable because of climate change, with no government solutions currently available. As extreme weather events increase insurance claims, premiums are surging, making it difficult for insurers to cover certain risks. Areas such as the Severn Valley and South Yorkshire are already experiencing heightened costs and reduced insurance options. Murphy warns that homes deemed uninsurable may struggle to secure mortgages, leading to negative equity and unsellable properties, which could trigger a significant property market crisis without government intervention.
Key facts
- Climate change could make homes across Britain uninsurable.
- Floods, heatwaves, droughts, wildfires, and rising sea levels are increasing insurance claims.
- Flood-prone areas in England, including the Severn Valley and parts of South Yorkshire, are seeing costs rise and cover become harder to find.
- The government Flood Re scheme is limited in scope and time-limited.
- A house that cannot be insured cannot be mortgaged, and a house that cannot be mortgaged cannot be sold at its expected price.
- Private insurers cannot solve this macroeconomic risk; government must become the insurer of last resort.
- The article references a 2022 OECD report on home ownership rates.
- Richard Murphy is Emeritus Professor of Accounting Practice at Sheffield University Management School and a director of Tax Research LLP.
Entities
Institutions
- Sheffield University Management School
- Tax Research LLP
- Flood Re
- OECD
- Forbes
- Bright Force Electrical
- Fire Scene Analysis
Locations
- United Kingdom
- England
- Severn Valley
- South Yorkshire
- United States
- Florida
- California
- Malibu
- Thames