As flood risks rise and coverage dries up, experts warn that the housing market in the United Kingdom may be heading for troubled waters.

What’s happening?

According to Phys.org, Bayes Business School’s Real Estate Research Center studied how flood risk and income levels affect home insurance. It found that low-income residents in flood-prone neighborhoods face an average annual loss from flooding that is 3.7% higher than that of wealthier neighbors.

“These disparities are projected to grow to 4.4% by 2050, and low-income people have less capacity to relocate — increasing the likelihood of many becoming climate prisoners stuck in deteriorating, uninsurable homes,” wrote the researchers.

Why is home insurance important?

When insurance companies determine that a property’s risk is too high, they may increase costs significantly or stop offering coverage altogether.

More than 4 million homes across the U.K. fall into medium- or high-risk flood zones. Many are in regions like the Thames Estuary, southwest England, and parts of Yorkshire. For people who can’t afford to move, these changes could force them to live in damaged homes without insurance support or the ability to relocate.

The root cause of this problem is the burning of oil, coal, and gas. The resulting harmful carbon pollution warms the planet, which increases the severity of rainfall, flash floods, and coastal flooding. The risk to homes is rising alongside global temperatures.

What’s being done about home insurance?

Bayes researchers recommend extending or replacing the U.K.’s joint government and insurance program, Flood Re, before it expires in 2039. This safety net helps cover high-risk properties. Without a replacement, millions could face a sudden loss of coverage and financial strain.

The center is also working with insurers, mortgage lenders, and climate data companies to improve how risk is measured and priced. Better data can help homeowners understand their risks and can guide smarter policy decisions.

Across the U.K. and beyond, governments are exploring similar solutions. Efforts such as community-based resilience funding or modernizing their homes to reduce their carbon footprint are just a few ways people can contribute.

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