Homes being built today could become uninsurable because of flooding, Aviva chief executive Amanda Blanc has warned. Based on current building patterns, 115,000 new homes will be built in flood zones over the next decade. The warning exposes a conflict between the business of selling houses and the need for homes that remain safe to live in long after the sale.
For housing produced as a commodity, a successful sale allows the developer to recover costs and realise a profit. The household buying it needs something that transaction alone can’t guarantee: somewhere fit to live for decades. A home’s use value — the shelter it provides — has to last through changing conditions, including risks that may become more severe after the builder has received payment.
The exposure is already substantial. About 6.3 million homes and businesses in England are at risk of flooding, according to the Environment Agency. Aviva’s research found that one in nine homes built between 2022 and 2024 are at medium to high risk. New construction is adding homes in exposed locations while millions of existing properties already face the danger.
“It’s very well known where these flooding areas are. Let’s think very carefully about homes that are being built,” Blanc said.
Knowing where the danger lies doesn’t settle what gets built there. Planning decisions, construction costs and the prospect of a sale all intervene between identifying a risk and preventing people from being exposed to it. Where a development can secure permission and attract buyers, it can remain commercially viable despite a flood risk that future occupants will have to live with. Profitability measures the return on the development; it doesn’t measure the household’s ability to withstand the consequences.
Those consequences also have to be considered over the lifetime of a building. Aviva estimates that nearly a third of new homes built in 2024 will face some flood risk by 2050, with one in seven at medium to high risk. These are projections, but they concern homes that have already been built. Their exposure could worsen while people are still relying on them for shelter.
The Met Office estimated earlier this year that, under current levels of global warming, record-breaking wet winters like the UK’s winter of 2023–24 have shifted from once-in-80-year events to once-in-20-year events. That estimate concerns extreme wet winters, rather than the fate of any individual property. It nevertheless shows why the conditions a home must withstand can’t be treated as fixed at the time of construction.
Blanc also said that building around flood zones requires a different approach, and that changes to properties can make them more or less vulnerable. Location isn’t the only decision that matters. How a home is constructed can affect the damage flooding causes.
Making a building more resilient can require spending before a sale, while the benefit may come years later. For a developer, that spending enters the calculation of costs, expected sale prices and profit. For the resident, it concerns the continued use of their home. Planning requirements can constrain the commercial calculation, but the interests remain distinct: the protection a household needs doesn’t necessarily correspond to what it can afford to pay for.
The government says it is addressing both existing exposure and future construction. A spokesperson for the Department for Environment, Food and Rural Affairs said it had committed a record amount of investment to protecting nearly 900,000 properties against billions of pounds of flood damage.
“Meanwhile our planning proposals will help ensure that housebuilding will not go ahead in areas that are at risk of flooding, helping us to build 1.5 million homes without compromising on safety.”
Aviva’s projection of 115,000 new homes in flood zones describes the continuation of current building patterns; the government’s statement promises to change those patterns. Its proposals don’t, however, remove the risk identified in recently completed homes. People will continue to need those buildings after the planning decisions and construction work are finished.
The state’s role extends beyond approving developments. Public spending on flood protection helps keep homes and businesses usable, committing collective resources to protecting property. That protection matters to residents, but it also demonstrates how the costs surrounding construction extend beyond the accounts of the business that builds and sells a property. A development can generate private revenue while leaving a continuing need for protection that no individual sale resolves.
Aviva approaches this problem from another position within the same system. A developer seeks a return from construction and sale; an insurer has to weigh premium income against the claims it might pay. Rising flood risk can therefore put their interests in conflict. A property may offer a viable sale for one business while becoming an unacceptable risk for another.
That gives an insurer a commercial reason to warn against further exposed construction. It also limits what residents can expect from insurance as a solution. Insurance can spread the financial cost of damage among policyholders, subject to the terms of their cover. It can’t stop water entering a building or make the building itself less vulnerable. If insurers eventually refuse cover, the physical danger remains.
For an owner-occupier dependent on wages, that withdrawal would place more of the financial consequences on the household. Owning the home they live in doesn’t give a worker the resources of a developer or an insurance company. Money needed to repair flood damage would have to come from resources also needed for daily life, and insurance becoming unavailable wouldn’t reduce the need for somewhere to live.
Under working-class political power and social ownership, the decision about where to build wouldn’t begin with whether a private developer could profit from selling the finished homes. Workers and residents could control a housing plan that weighs the need for homes against flood exposure over their expected lifetime. Land, construction and flood protection could be planned together. A site that costs more to build safely would be assessed for the housing it provides and the lasting risks it creates, rather than for the return available on its sale.
That wouldn’t make flood zones disappear or remove the need to make difficult choices about land, labour and materials. Some risk might remain even after choosing sites and building protections. The difference would be who makes those choices and who carries their cost. Resources devoted to safer construction, defences and repairs could be treated as part of providing housing collectively. A household’s protection wouldn’t have to depend on whether covering its particular home still makes commercial sense to an insurer.
Blanc’s warning concerns homes that might become uninsurable, rather than a finding that every property at risk will lose cover. But the possibility identifies a particularly sharp consequence of organising housing around sale and financial return. A household could be left carrying more of the cost of flooding at precisely the point when a company specialising in risk decides that covering it no longer makes commercial sense.
