Flood risk: Academics urge better communication as forecasts drive down property prices

This has a negative effect on property prices.

Researchers are concerned that property devaluation, especially in flood-prone coastal areas could have long-term economic impacts on homeowners, investors, and the broader economy. They warn flood risk management requires urgent and careful consideration at both national and global levels.

Flooding is becoming increasingly common globally and its intensity is likely to increase under future climate projections.

Last year, the Environment Agency found that 115,200 properties were at high or medium risk of flooding from rivers and the sea in the Yorkshire and Humber region.

Hull is especially vulnerable as it is located on the banks of the Humber Estuary, with much of it exposed to volatile tidal swells.

Occupying the flat bottom of a low-lying land basin, about 90 per cent of it sits below sea level at high tide, and just two per cent is considered not to be at risk from flooding.

The city has seen a number of floods throughout the years. The flood of 2007 devastated the area, resulting in damage to over 9,000 homes and business properties.

In December last year, gales saw waves crash onto beaches on the Yorkshire coast and bring flooding to the area during Storm Darragh.

In the UK, the average annual damage to business premises from coastal flooding alone exceeds £120m.

The research highlights a shift in consumer behaviour, where prospective homeowners and renters are prioritising risk-averse locations, with flood prediction information dominating real estate decisions over personal preferences like location aesthetics.

It added that flood models – an essential tool for managing flood risks – are not without their uncertainties. These models often include simplifying assumptions and data limitations, which can lead to discrepancies in predictions.

While these uncertainties are well-known among experts, the public’s lack of awareness can lead to unintended consequences in the housing market.

As more flood prediction data becomes accessible online, property values and investment decisions are being influenced by a perception of increased risk, even when the actual uncertainty in the flood models is not fully understood.

Dr Scott Mahadeo, senior lecturer in the faculty of business and law at the University of Portsmouth, said: “Our study shows that flood predictions, despite their uncertainties, are the primary factor influencing people’s willingness to pay for properties. When flood prediction data is available, people are more likely to shy away from properties in areas predicted to be at risk of flooding, even if the predictions themselves are uncertain or conflicting.”

The study used an interdisciplinary approach, combining flood modelling, surveys of 731 UK residents, and geospatial analysis. The findings showed that when confronted with flood prediction maps, respondents demonstrated a clear preference for safer, lower-risk locations, even if those areas were less aesthetically appealing or farther from the coast.

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Researchers highlighted significant real estate risks linked to access to multiple flood prediction sources. Survey respondents were willing to pay more for properties outside flood-prone areas - even if these locations didn’t match their personal preferences - showing that flood risk information can drive risk-averse real estate decisions.

Dr Mahadeo added: “There is a lack of consideration for flood model uncertainty in real estate decision-making. People are making decisions based on extreme flood predictions, and they’re not factoring in the potential errors or variability in the data. This suggests that we need to focus more on effectively communicating the uncertainties in flood predictions to the public to avoid unintended economic consequences.”

The research also underlines the need for better communication of flood risks and their uncertainties to the public, particularly as flood maps become more widely available.

The paper’s authors are calling for action to refine how flood risk is communicated and to manage the societal impacts of uncertain flood predictions. As climate change accelerates, the frequency and intensity of flooding are expected to rise, increasing the urgency of these findings. The paper was a collaboration between the University of Portsmouth, University of Oxford and Coventry University.