Insurance chief warns UK is building homes that flood risk could make uninsurable

One of the UK's largest insurers has warned that a significant share of the homes being constructed today could eventually become impossible to insure, as flood risk across the country continues to intensify. Amanda Blanc, chief executive of Aviva, said properties are going up in places where the danger of flooding is already well documented, and described current development patterns as making little sense in that context.

Speaking to the BBC's Big Boss Interview podcast, Blanc said the risk of flooding is "absolutely increasing". Her warning was underpinned by a striking projection: if building continues along present lines, roughly 115,000 new homes will be erected inside flood zones over the next decade. "That doesn't seem to me to make sense," she said, adding that planners and policymakers need to think much harder about exactly where new housing is being sited.

England is already widely exposed. According to the Environment Agency, about 6.3 million homes and businesses sit at risk of flooding. Aviva's own analysis sharpens that picture for recent construction, finding that one in nine homes completed between 2022 and 2024 are at medium to high risk of flooding — a figure far higher than the national average would imply for a stock of housing that is, on average, several decades old.

Blanc said England was "for sure" building homes that may prove uninsurable at some point in the future, and argued the information needed to prevent this already exists. "It's very well known where these flooding areas are. Let's think very carefully about homes that are being built." Her argument was less that flood risk cannot be managed than that it is being managed badly, or not at all, through the planning system.

She also argued that risk management cannot stop at the boundary of a designated flood zone. Development that sits alongside — or immediately next to — those zones requires a different approach, she said, because exposure is rarely confined to a neat line on a map. Individual owners and builders can make a considerable difference, too. "You can do all sorts of different things to your property to make it more or less vulnerable to flood," Blanc noted, pointing to the range of retrofit and design measures that can reduce vulnerability.

The insurer's longer-horizon figures are more sobering still. Aviva's research suggests that close to a third of new homes built in 2024 will face some level of flood risk by 2050, while one in seven of those homes will be in the medium-to-high risk band, as extreme weather becomes more acute. That is a substantial prospective shift in the risk profile of the housing stock, and one that falls on buildings with a century or more of useful life ahead of them.

Climate science is already pointing in the same direction. Earlier this year the Met Office estimated that, at current levels of global warming, record-breaking wet winters of the kind the UK experienced in 2023-24 have shifted from events expected roughly once in 80 years to events expected about once every 20 years. The underlying baseline is moving, which matters enormously for insurers pricing risk decades into the future on properties that will still be standing.

The human cost of that shift is not abstract. Homes in Loughborough were hit by floods in January last year, with residents watching water rise past their front doors. Images like those underline what the industry figures represent: not a spreadsheet category but damaged possessions, displaced families and repair bills that fall on householders.

The BBC has approached the government for comment. Blanc's intervention is particularly timely because it comes ahead of Chancellor John Healey's first Budget on 28 October, and she used the interview to caution against what she called policy "kite flying" — announcing ideas without a settled plan and then leaving people to make financial decisions in the meantime. The uncertainty itself, she implied, carries a cost.

That was a lesson drawn from pensions rather than flood insurance. Aviva is a major provider of private pensions in the UK, and Blanc said speculation in recent Budget cycles about pension reform triggered an extraordinary surge in withdrawals. In the past year the firm saw around 30 times the normal level of pension withdrawals, she said, adding that customers may come to regret it, because a tax-free lump sum once taken cannot be replaced.

The policy announcements made so far are limited. They include a scheme intended to help first-time buyers get onto the property ladder, and a commitment from Healey to deliver a "new age of industrialisation" for the UK. Neither addresses directly the question Blanc has raised about where homes are built relative to flood risk.

On investment, Blanc said Aviva is "ready with capital" to put into UK infrastructure. The group already invests more than £100bn in the UK, she said, of which around £35bn goes into infrastructure — from hospitals and schools to windfarms. Investment, in her view, offers solid returns for pension holders and scheme members, though she stressed that further detail is needed before those ambitions can be realised.

She declined to take a position on the live debate over the pension triple lock, under which the state pension rises by the highest of average wage growth, inflation or 2.5%. But she did set out the trade-off: any reduction in state pension provision would need to be offset by higher private saving, and that balance needed careful thought rather than assumption.

Taken together, her remarks amount to a warning that both housing policy and pension policy are being shaped by speculation. On flood risk, the immediate ask is straightforward — apply existing knowledge about flood zones to decisions about new development, and require better protection for homes on the edges of high-risk areas. Whether the government listens before 28 October will determine how much of the risk described in Aviva's research is locked into the housing stock for decades to come.