We must get real about flooding
As Valuers of property we are way behind the curve on flooding and if the profession doesn’t get its house in order, we are going to get far more than our feet wet in the future.
Understanding value involves consideration of risk – and for some reason valuers are not gripping the risk to property associated with flooding.
All the evidence suggests that intense weather events giving rise to high volume rainfall over short periods are likely to increase in frequency. Combined with the development of the floodplain, it seems to me blindingly obvious that more property will either suffer flood events or will have an increased risk of flooding in the future.
Property that floods is worth less than the identical property that doesn’t – we may argue about the quantum, but surely nobody disputes the principle.
So why would you, as an investor, purchase a property with flood risk? Clearly only if it was significantly cheaper – and I would suggest it would need to be a lot cheaper if insurance and ability to mortgage were difficult to obtain.
So if you are valuing a house today – are you looking at flood risk? If you have identified risk, how are you evaluating it? How are making an adjustment to value?
If you are doing a residual valuation for a development site in the floodplain, have you comprehensively assessed flood risk? It’s not actually good enough to rely on the EIA submitted by the developer to the LPA – it is unlikely to be impartial. Get this wrong and your PI cover may look grossly inadequate.
Government will never be able to deliver effective flood defence – the cost would be unrealistic and is also unlikely to be effective – one location’s defence is likely to be another’s problem.
The valuation profession has got to start getting this right – firstly to stop the wave of negligence claims that are going to flow, and secondly to stop development in areas of high risk. Once the residual valuations are properly conducted, the inappropriate site will be abandoned – the implications of that will be wholesale reallocation into greenbelt.