England's growing flood risk problem is on a collision course with the government's house-building ambitions, after 17 insurance industry bodies, insurers and campaign groups warned the secretary of state that proposed changes to the National Planning Policy Framework could leave thousands of new homes exposed to flooding and ultimately uninsurable.
That test, first introduced under PPS25 in 2006 and folded into the NPPF in 2012, requires developers to prove no reasonably available lower-risk sites exist before building in flood-prone areas.
A December 2024 revision broadened its scope to all sources of flooding after a High Court ruling earlier that year. The proposed amendments would partially unwind those protections.
The signatories backed the government's target of 1.5 million new homes but argued that weakening safeguards would be counterproductive. The ABI's latest tracker put weather-related property insurance payouts at £1.2 billion, up 14% year on year, with £758 million stemming from damage to homes alone.
The Environment Agency estimates 6.3 million homes in England now face flood risk, up from 5.5 million in 2018, with surface water accounting for 4.6 million of those properties. Research by Aviva found 11% of homes built between 2022 and 2024 are already at risk, projected to reach 15% by 2050.
At the centre of the dispute is Flood Re, the government-backed reinsurance scheme due to expire in 2039 that excludes properties built after 2009 to discourage construction in high-risk areas.
The mechanism is already under strain: Flood Re's annual reinsurance costs have risen by £100 million in recent years as cover for accelerating flood risk grows more expensive. The letter warned that loosening planning rules would push both pre- and post-2009 properties further from the point where an affordable, risk-reflective private market could take over.
"We are not on track to transition from Flood Re to an affordable risk-reflective market when the scheme is due to end in 2039," the letter states, adding that high flood risk homes could "become uninsurable and struggle to access mortgages."
The challenges are hardly unique to England, with governments from the United States to the Netherlands and Australia grappling with how to balance development, insurance affordability and climate adaptation.
Rather than diluting the sequential test, the signatories called for urgent implementation of Schedule 3 of the Floods and Water Management Act 2010, passed 16 years ago but never enacted, to mandate sustainable drainage systems.
Polling cited in the letter showed two-thirds of the public do not believe the country is prepared for future flooding, while the average flood insurance payout reached £30,000 in 2025, up 60% on the prior year. Basic resilience measures for a new home cost roughly £1,000, the International Property Flood Resilience Association estimates.
The groups said they would welcome a meeting with the secretary of state to discuss how housing delivery and flood resilience could be pursued in tandem.
