New analysis reveals that nearly 9.5 million energy-efficient homes in the UK could face increased risks of flooding and subsidence by 2055. This emerging data highlights a concerning trend where properties with higher Energy Performance Certificate (EPC) ratings may be more vulnerable to environmental hazards than previously understood.

Energy efficiency and environmental risk

Property data firm TwentyCi has found that homes with stronger EPC ratings, particularly those rated A to C, show greater exposure to long-term environmental risks such as flooding and ground instability. Currently, 37% of UK homes are rated EPC D, with 35% rated C, but it is the higher-rated properties that appear more susceptible to these hazards.

Colin Bradshaw, CEO of TwentyCi, emphasised the limitations of relying solely on EPC ratings for assessing mortgage suitability. He stated, “While energy performance certificate (EPC) ratings remain a critical tool in assessing mortgage suitability, analysis of UK residential property data shows they do not reliably indicate exposure to key environmental risks such as flooding and ground instability.”

Bradshaw added, “In fact, some of the UK’s most energy-efficient homes are also among the most vulnerable to flooding and subsidence.” This creates a potential blind spot for lenders, who may underestimate the risk within their mortgage portfolios if they do not consider environmental factors alongside energy efficiency.

Flood risk across EPC bands

The analysis shows that flood risk is highest among EPC G-rated homes, with 5.65% currently classified as high risk, rising to 6.94% by 2055. However, B-rated homes are not far behind, with 5.27% currently at high risk, increasing to 6.52%, which equates to over two million properties.

Interestingly, homes rated A to C exhibit higher flood risk exposure than those in bands D to G, challenging assumptions that lower-rated properties are more vulnerable. Bradshaw commented, “As climate pressures intensify, the data underscores the need for a more holistic approach to mortgage underwriting. Relying solely on EPC ratings could leave lenders exposed to hidden risks, particularly within segments of the housing market traditionally considered ‘safe’.”

Subsidence risk linked to EPC ratings

Subsidence risk also appears to correlate with EPC ratings, with B-rated homes currently showing the highest exposure at 6.74%. This figure is projected to rise sharply to 23.29% by 2055, potentially affecting around 7.4 million homes. The pattern remains consistent across the bands, with higher EPC-rated properties generally more exposed to subsidence than less efficient homes.

Coastal erosion presents a different risk profile, with G-rated homes most exposed at 0.09%, followed by F-rated properties at 0.04%. Although these percentages are smaller, the impact of coastal erosion can be severe, often resulting in total loss of the property.

What this means for landlords

For landlords, these findings highlight the importance of considering environmental risks alongside energy efficiency when managing property portfolios. While improving EPC ratings is essential for reducing energy costs and meeting regulatory requirements, it does not guarantee protection from flooding or subsidence.

Landlords should be aware that properties with higher EPC ratings may carry hidden environmental vulnerabilities that could affect insurance premiums, mortgage lending, and long-term asset value. A comprehensive risk assessment that includes flood and ground stability factors is crucial for informed decision-making and safeguarding investments.

Source: Based on reporting from Property118

TLA Training Academy

The Landlord Association has launched its new Training Academy for UK landlords, providing structured guidance, compliance education, and practical knowledge to support landlords at every stage. Members can now complete the programme and become TLA Certified Landlords at no additional cost as part of their membership.

Landlords can explore the Academy here: https://landlordassociation.org.uk/tla-academy/

Those looking to join and access the full training and certification can register here: https://landlordassociation.org.uk/landlord-association-membership-uk/

TLA update

The Landlord Association is currently onboarding new service providers into its Trusted Partner Hub, a new initiative designed to support landlords, tenants, letting agents, and property managers with vetted, high-quality services. As one of the fastest growing landlord associations in the UK, TLA offers partners direct access to an engaged and active member base at the point of need. Service providers across legal, maintenance, insurance, finance, mortgages, tenant screening, and property services can register their interest here: https://landlordassociation.org.uk/become-a-tla-service-partner/