Storms in the UK towards the end of last year resulted in some 100,000 homes being left without power and thousands of people stranded at airports and stations as they tried to get home for Christmas. With many home-owners facing uncertainty with regard to their insurance policies, much urgent discussion has taken place and planning minister Nick Boles is already pushing for more stringent restrictions when committing to new builds in flood-prone areas.
In spite of this, and to recognise the fact that many people already live with the consequences of flooding, the government has entered into agreement with the insurance industry to protect those people who already inhabit a flood zone. The Flood Re reinsurance scheme promises to offer affordable insurance for homes located in areas susceptible to flooding by capping premiums and setting up a central pool of money to cover pay outs for flood damage. There is currently a lot of debate about the extent of such cover and the home owners who are entitled to it, much of it informed by the extent of the problem over this past winter.
According to press reports, more than 4,000 homes have been built on flood plains since 2009. The total number of builds in the UK recently reached its highest in five years: 67,422 new homes were registered by the NHBC for the first half of this year. At first glance, it could seem that the risk surrounding a mere 4,000 homes is relatively low by comparison. And yet when one considers that more than 100 flood warnings were issued last Christmas, it is clear that builds on flood plains remain a potentially very risky issue for local authorities, the construction industry, home owners and insurers alike.
One school of thought which has been advanced is that part of the problem lies with residential developers, some of whom will engage in development on land at risk of flooding if the relevant consents are forthcoming.
The other side to the story, however, is the growing concern around the shortage of new homes. Combined with an appetite to get Britain building again, the construction industry could be justified in arguing that the demand for housing largely outweighs the risks of flooding, the frequency of which is always uncertain. And with the Joseph Rowntree Foundation estimating a property shortage of more than a million homes by 2022, it’s this side of the story that highlights the urgency to ramp up the rate of construction in the UK. Furthermore, with David Cameron recently announcing an ‘enormous programme’ for investment in flood defences between now and 2020, future provision for flood scenarios looks considerably brighter.
Concerns have also been raised about local authorities that have issued planning consents in areas that have been identified by the Environment Agency as at risk. Nick Boles recently issued a firm warning to such councils, reminding them that any new builds on flood plains must be “flood resistant and resilient,” with further caution that developers will have to start adhering to “stringent tests” if building on flood plains. To what extent this will be implemented and enforced remains to be seen, although new guidance is already in the pipeline, aiming to encourage councils to consider more closely any builds that increase the risk of flooding. This all certainly seems to be a step in the right direction with closer working relationships between councils, developers and the Environment Agency key to handling risk management.
There is no doubt that the floods of recent years have proved extremely distressing. However, if funding for improved flood defences is set to increase and is coupled with the promise of tighter restrictions for developers and councils, then it would appear that some fundamental and key steps are already in motion which should provide a workable framework for all involved in this industry. As the government and construction industry look to reduce the property shortage and create more affordable housing, it’s essential to tread carefully and act responsibly.
Tracy Hall is a partner at Watson Burton