New analysis reveals that nearly 9.5 million energy-efficient homes in the UK are projected to face increased risks of flooding and subsidence by 2055. This challenges the assumption that higher energy performance ratings necessarily correlate with lower environmental risks, highlighting a complex risk landscape for landlords and lenders alike.

Energy Efficiency and Environmental Risk

Data from property analytics firm TwentyCi indicates that homes with stronger Energy Performance Certificate (EPC) ratings—particularly those rated A to C—are more exposed to long-term environmental hazards such as flooding and ground instability than less efficient properties. Currently, 37% of UK homes are rated EPC D, with 35% rated C, but it is the higher-rated homes that show greater vulnerability when environmental risk factors are considered.

TwentyCi’s chief executive, Colin Bradshaw, emphasises the limitations of relying solely on EPC ratings for assessing mortgage suitability. He states, “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.”

Flood Risk Among Energy-Efficient Homes

The analysis highlights that flood risk is particularly pronounced among certain EPC bands. Homes rated G currently have the highest flood risk, with 5.65% classified as high risk, rising to 6.94% by 2055. However, B-rated homes are close behind, with 5.27% currently at high risk, increasing to 6.52%, which equates to over two million properties.

Bradshaw warns that “relying solely on EPC ratings could leave lenders exposed to hidden risks, particularly within segments of the housing market traditionally considered ‘safe’.” This suggests that climate change and environmental pressures may alter the risk profiles of properties previously deemed low risk, underscoring the need for a more comprehensive approach to risk assessment.

Subsidence Risk and Coastal Erosion

Subsidence risk also disproportionately affects higher-rated homes, with B-rated properties currently showing the highest exposure at 6.74%. This figure is projected to escalate dramatically to 23.29% by 2055, potentially impacting an estimated 7.4 million homes. This pattern of greater subsidence risk among more energy-efficient homes is consistent across EPC bands.

In contrast, coastal erosion risk remains relatively low overall but is highest among G-rated homes at 0.09%, followed by F-rated properties at 0.04%. Although the number of affected properties is smaller, the impact of coastal erosion can be severe, often resulting in total loss, according to TwentyCi.

What this means for landlords

For landlords, these findings highlight the importance of considering environmental risk factors alongside energy efficiency when managing property portfolios. Properties with high EPC ratings may still face significant vulnerabilities to flooding and subsidence, which could affect insurance, maintenance costs, and tenant safety.

Landlords should engage with comprehensive risk assessments that incorporate climate projections and ground stability data to better understand potential exposures. This approach will help in making informed decisions about property investments, maintenance priorities, and insurance coverage.

Moreover, lenders and insurers may need to refine their underwriting criteria to integrate these broader environmental risks, ensuring that mortgage portfolios and insurance policies remain resilient in the face of evolving climate challenges.

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/