Guest blog for SHIFT Environment by Adam Lawrence, Propenomix
A record-breaking summer has plenty of people asking whether climate change is showing up in property values yet. My answer, as a property economist whose day job these days is mostly investment consultancy: not really, or at least not directly. It is showing up somewhere far less glamorous. The insurance renewal, the lender’s questionnaire and the maintenance budget.
That matters, because it is the route that catches owners late.
Start with water, still the bigger UK story. The Environment Agency’s latest national assessment puts around 6.3 million properties in England in areas at risk of flooding, rising to around 8 million by the middle of the century. Roughly one property in four.
Most homeowners are cushioned for now by Flood Re, the government-backed scheme that keeps premiums affordable. It is due to end in 2039, when insurers are meant to price on actual risk. Many readers of this blog may already know the catch from their own renewals: Flood Re does not provide buildings cover for social housing, for blocks of more than three flats, or for homes built since 2009. For much of the housing association sector, “risk-reflective pricing” isn’t a 2039 problem. It is this year’s premium.
Then heat, the newer half of the story. The Met Office has provisionally named summer 2026 the UK’s hottest on record, beating a record set only in 2025, and reckons climate change made it around 130 times more likely. I have long argued that rainfall matters more to British property than temperature. Two record summers in a row have made me a little less sure. Stock that is hard to keep cool (top-floor flats, single-aspect units, big expanses of glazing) will be harder to live in, draw more complaints and, I suspect, eventually take longer to let or sell. None of that appears in a valuation today. All of it lands in a budget.
So what should an owner do? Three undramatic things:
- Know which assets sit in flood or overheating hotspots, before your insurer or lender tells you.
- Track premiums and excesses per property over time. That trend is the market’s early price signal.
- Weigh resilience works against the value they protect, rather than filing them under compliance cost.
Too cynical? Perhaps. But in my experience markets rarely reprice risk gradually. They ignore it for years, then reprice it in a hurry.
Want an independent view of what climate risk means for your portfolio’s value, lending and running costs, or a wider review of your portfolio and business strategy? My half-day strategic review ends with a written plan you keep. Get in touch at [email protected].