OVER A QUARTER OF HOMEOWNERS DO NOT CHECK FLOODING, SUBSIDENCE, AND CRIME RATES BEFORE BUYING THEIR HOME
- London, Northern Ireland and the South East are the regions with the highest average premium for properties in either a flood prone or subsidence risk area
- Two fifths of homeowners do not check for subsidence and flood risk before purchase
- Nearly one-third (31%) wait until they move in before buying home insurance
- Local COVID-19 ‘R rate’ is influencing buying decisions, with 40% factoring it into their move
26 August 2020 – During the pre-move phase of home buying, most homeowners would check for major potential risks such as flooding, subsidence, and crime rates. However, new research by comparethemarket.com reveals that over a quarter of homeowners (29%) do not check for these risks beforehand. Aside from possible future shocks, this could be leaving them at risk of higher insurance premiums or invalidating their policy if filled incorrectly.
Crime rates are the main factor not considered prior to purchasing (46%). Nearly one-fifth (19%) of homeowners also do not check for subsidence and an additional 22% do not consider whether the home they are looking to buy is in a flood risk area.
People in Northern Ireland (45%), Scotland (42%) and the North West (33%) are amongst the highest to not check these factors.** In comparison, London (74%), East of England (71%) and West Midlands (70%) are among the top three regions to enquire about these risks before going ahead with their purchase.***
Subsidence, flooding and other factors can all affect the price of home insurance premiums, due to the increased levels of risk associated with them. According to comparethemarket.com data, the regions with the highest average premium for properties affected by subsidence was London (£732), the South East (£604) and Northern Ireland (£596). However, these are also the areas where the highest savings can be made by switching home insurance policy to the cheapest premium available - saving on average £304 (London), £266 (South East) and £369 (Northern Ireland) respectively.
For flooding, again, London (£584), Northern Ireland (£579) and the South East (£550) were the regions with the highest average premium for flood prone properties. Whereas Northern Ireland (£242), Scotland (£212) and London (£190) were the regions where the highest savings can be made switching to the cheapest premium available.
| Region (ranked in order of highest average quoted premium policy for flood prone property) | Sum of average quoted premium policy for a flood prone property (comparethemarket.com data Jan-June 2020) | Average saving to be made for property in flood prone area between average quoted premium vs cheapest policy premium (comparethemarket.com data Jan-June 2020) | Region (ranked in order of number of properties at significant risk of flooding by Environment Agency) |
| Greater London | £583.91 | £190.63 | 5 |
| South East England | £549.50 | £175.83 | 1 |
| East of England | £490.11 | £144.61 | 6 |
| West Midlands | £479.22 | £162.71 | 8 |
| East Midlands | £474.62 | £152.94 | 3 |
| South West | £467.34 | £164.70 | 2 |
| North West | £447.31 | £140.04 | 7 |
| Yorkshire and Humber | £444.40 | £156.70 | 4 |
| North East | £427.31 | £140.87 | 9 |
There is also the consideration that incorrectly filling out a home insurance policy could lead to a policy claim being invalid – as individuals need to correctly state whether the property is in a flood or subsidence risk area.
Despite these obvious risks, there is also the potential damage risk to personal property in the process of moving home. Some insurance policies will cover damage in transit, as long as you’re using a professional removal company, although there are likely to be limits to the amount of cover. When asked whether they had thought about buying a home insurance policy before purchase, nearly one-third (31%) wait until they had moved in before doing so, fewer than a quarter (23%) take one out prior to moving in. Some mortgage providers will ask to see a copy of the buildings insurance policy upon completion, but contents insurance is down to the individual.
Thinking about the next possible home move, nearly two-fifths of homeowners (40%) say the local area’s COVID-19 rate of infection (known as the ‘R’ rate) will influence their decision. Just one quarter (25%) feel it would not.
| Region | The local ‘R’ rate will influence my decision | The local ‘R’ rate will not influence my decision | R number estimates, as of 7 August (Source Gov.uk) |
| South East England | 33% | 27% | 0.8-1.0 |
| South West | 32% |
28% |
0.8-1.1 |
| East Midlands | 40% | 29% | 0.8-1.0 |
| Yorkshire and Humber | 36% | 23% | 0.8-1.0 |
| Greater London | 61% | 19% | 0.8-1.1 |
| East of England | 46% | 19% | 0.7-0.9 |
| North West | 37% | 30% | 0.8-1.1 |
| West Midlands | 44% | 19% | 0.8-1.0 |
| North East | 24% | 31% | 0.8-1.0 |
Chris King, head of home insurance, comparethemarket.com comments:
“It’s always better to be safe than sorry when buying a property. If you’ve fallen in love with a home, some may be tempted not to investigate any potential issues in a desire to buy it come what may. This could be an error – it is vital that you conduct thorough searches through your conveyancer to provide you with key information prior to purchase. Problem areas like subsidence and flood risks are material - both could impact your home insurance or mortgage. It’s why some mortgage lenders may even insist on an environmental search before offering a mortgage. Not only could these risks add to the premium, but they could impact the validity of the policy if any details have not been correctly filled out when you need to make a claim.
“Taking out a home buyer survey or doing your own research and carrying out local land registry searches of the area, in conjunction with any instructions you’ve provided to your solicitor, can help you avoid this potential scenario. But should the property have these issues and you still wish to go ahead and are able to – it still very much pays to shop around for home insurance. As even in areas of flooding and subsidence, there are still hundreds of pounds to be saved between the average and cheapest home premium available.”
ENDS
Notes to Editors
Survey of 2,011 UK homeowners carried out on behalf of Populus 6-10th August 2020.
*Overall percentage of UK survey respondents who had checked for flooding, subsidence, and crime rates prior to moving into their existing home
| Overall | Flooding | Subsidence | Crime Rates | Average Median |
| Did check before buying existing home | 74% | 75% | 46% | 65% |
| Did not check before buying existing home | 22% | 19% | 46% | 29% |
**Broken down by region, survey respondents who did not check for flooding, subsidence, and crime rates prior to moving into their existing home
| Region | Flooding | Subsidence | Crime Rates | Average |
| Northern Ireland | 30% | 37% | 67% | 45% |
| Scotland | 32% | 31% | 62% | 42% |
| North West | 26% | 20% | 53% | 33% |
| Yorkshire and Humber | 27% | 22% | 50% | 33% |
| North East | 30% | 27% | 41% | 33% |
| South West | 19% | 19% | 59% | 32% |
| South East England | 32% | 19% | 46% | 32% |
| Wales | 20% | 19% | 44% | 28% |
| West Midlands | 17% | 13% | 45% | 25% |
| East Midlands | 20% | 13% | 40% | 24% |
| East of England | 16% | 17% | 40% | 24% |
| Greater London | 17% | 16% | 34% | 22% |
***Broken down by region, survey respondents who did check for flooding, subsidence, and crime rates prior to moving into their existing home
| Region | Flooding | Subsidence | Crime Rates | Average |
| Greater London | 81% | 81% | 61% | 74% |
| East of England | 81% | 80% | 53% | 71% |
| West Midlands | 81% | 81% | 49% | 70% |
| East Midlands | 77% | 82% | 50% | 70% |
| Wales | 76% | 77% | 43% | 65% |
| South East England | 72% | 75% | 48% | 65% |
| South West | 78% | 78% | 35% | 64% |
| North West | 71% | 75% | 40% | 62% |
| Yorkshire and Humber | 70% | 75% | 41% | 62% |
| North East | 63% | 65% | 49% | 59% |
| Scotland | 66% | 64% | 28% | 53% |
| Northern Ireland | 65% | 60% | 26% | 50% |
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