Business
The influence of climate change on home insurance and mortgage decisions
CLIMATE change is undeniably altering the landscape of home insurance and mortgage decisions and, as risks increase, both industries are adapting, leading to higher costs and a stricter criterion for homeowners.
Pete Mugleston, MD and Mortgage Expert at www.onlinemortgageadvisor.co.uk, discusses how these shifts are impacting decisions around home insurance and mortgages.
Climate change isn’t just changing our weather patterns, it’s shaking up the housing market, especially when it comes to home insurance and mortgage decisions. With the UK facing increasing risks from floods, storms and coastal erosion, homeowners and financial organisations are rethinking their strategies.
Flooding has become a significant concern across the UK with more frequent and severe storms rendering areas once considered safe, at risk. This shift has substantial implications for home insurance. According to the Environment Agency, approximately 5.2 million properties in England are at risk of flooding*. This number is expected to grow making it increasingly difficult for homeowners in these areas to find affordable insurance. For those already living in flood-prone zones, this can result in a significant rise in insurance costs, sometimes making their homes uninsurable through traditional means.
For homeowners in high-risk areas, insurance premiums are skyrocketing. Insurers are setting stricter terms and conditions often requiring homeowners to implement flood defences for coverage. Some insurers are creating exclusion zones where they simply won’t provide coverage at all. This trend is particularly noticeable in coastal areas experiencing significant erosion and increased storm activity. To address this gap, specialised insurance policies are emerging. These policies, often more expensive, cater specifically to homes in high-risk areas, offering coverage traditional insurers might decline.
Lenders are also becoming more cautious about approving mortgages for properties in high-risk areas. If a home is uninsurable its value drops, making it a risky investment for lenders. As a result, lenders are scrutinising flood risk assessments more closely and may require proof of insurance before approving a mortgage. In some cases, they may refuse to lend altogether.
Properties in high-risk areas may see decreased valuations, which can affect the loan-to-value ratio making it harder for buyers to secure favourable mortgage terms. On the other hand, areas deemed low risk are seeing increased demand driving up property prices. Buyers and lenders alike are prioritising these safer investments, sometimes at the expense of affordability.
As climate change progresses, these trends are likely to intensify. Both insurers and lenders are investing in better predictive models to accurately assess climate risks. Homebuyers and homeowners need to stay informed about these risks and incorporate them into their long-term planning and keep up to date with the latest climate risk assessments, understanding how they might affect the area is crucial. It’s also important that homebuyers and homeowners acknowledge the ease that implementing certain flood defences and other protective measures may offer when trying to obtain insurance and a mortgage. Finally, considering the long-term feasibility of staying in a high-risk area is vital as, in some cases, relocating to a lower-risk area might be the most beneficial financial decision.
Business
Ferry Terminal ‘extremely busy’ due to ongoing Holyhead closure
PEMBROKE DOCK Ferry Terminal has been experiencing significant congestion today as ferry services remain under immense pressure following the closure of Holyhead Port earlier this month.
The disruption, caused by storm damage, has rerouted ferry traffic through Pembrokeshire, leading to long queues and crowded facilities at the terminal.
The Herald can confirm that it has been very busy today with cars, lorries, and foot passengers queuing in large numbers. Staff are working tirelessly to manage the influx, directing vehicles and assisting passengers as they prepare to board the heavily booked ferries.
A spokesperson for the Port of Milford Haven said: “We are working closely with ferry operators and local authorities to ensure traffic flows as smoothly as possible, but the sheer volume of vehicles is causing unavoidable delays.”
Travelers are being urged to arrive early for their sailings and to remain patient as the terminal operates at full capacity.
Both Stena Line and Irish Ferries have increased capacity on their Pembrokeshire routes, deploying larger vessels, including the Stena Adventurer and the MV James Joyce, to handle the surge in demand.
From our position at the terminal, our photographer has captured photos showing long lines of vehicles, groups of foot passengers carrying luggage, and port staff coordinating efforts to ease congestion.
Authorities are advising non-essential travelers to consider rescheduling their journeys where possible and to monitor updates from ferry operators closely.
(Photos: Martin Cavaney/Herald)
Business
52 homes to be built in Roch as scheme gets final sign-off
THE FINAL stage of approval for a near-£10m Pembrokeshire residential development of 52 homes has been given the go-ahead.
Back in April, members of Pembrokeshire County Council’s planning committee backed an application by Wakefield Pembrokeshire Ltd for the development, which includes four one-bed affordable housing units, on land near Pilgrims Way, Roch.
18 objections to the scheme were received, raising concerns including an “inadequate” affordable housing level, it being a high density development for a rural area, a loss of green space, the size of some of the homes, and pressures on existing services and facilities, and fears it may lead to an increase in second homes.
Nolton & Roch Community Land Trust (N&RCLT) has raised its concerns about a lack of affordable homes at the development, calling for a 20 per cent affordable homes element, as recommended by policy.
An officer report for members, recommending conditional approval, said: “It is apparent that the proposed development is not fully policy compliant, insofar as it cannot deliver the indicative 20 per cent affordable housing sought [by policy].
“However, a substantial positive social impact will arise through the provision of housing, including four one-bed affordable housing units, in meeting identified needs for both market and affordable housing.
“Financial obligations identified to mitigate adverse impacts arising from the proposed development cannot be met in full. However, [policy] acknowledges that in such circumstances contributions may be prioritised on the basis of the individual circumstances of each case.”
Speaking at the meeting, agent Gethin Beynon said the project had a “significant economic value” of around £10m, and the local applicant had “a sense of stewardship to the local community,” offering affordable housing and community infrastructure towards highways and education.
Approval was delegated to the council’s head of planning to approve the application, subject to the completion of a Section 106 planning obligation, making community financial contributions.
The Section 106 agreement was recently agreed, with the application now formally approved.
Business
World of engineering and welding SPARCs interest in Ysgol Harri Tudur’s female learners
AN EVENT hosted by Ledwood Engineering gave girls from Year 8 and 9 at Ysgol Harri Tudur first-hand experience of the world of engineering recently.
Engineering is a booming sector in Pembrokeshire with a high demand for skilled workers in exciting career pathways associated with the development of low carbon and renewable energy industry and the Celtic Freeport.
The young women heard from industry experts on the importance of engineering in Pembrokeshire, and had hands on experience using a welding simulator, at the company’s Pembroke Dock site.
The learners are part of the County’s SPARC (Sustainable Power and Renewable Construction) initiative aimed as inspiring and empowering young females to consider careers in science, technology, engineering and mathematics (STEM) pathways where females are under-represented in the workforce.
SPARC is funded through an alliance comprising Blue Gem Wind, Ledwood Engineering, Port of Milford Haven, RWE Renewables, Pembrokeshire County Council, Pembrokeshire College and the Swansea Bay City Deal.
Mrs Laura Buckingham, SPARC practitioner at Ysgol Harri Tudur said: “Our learners had a fantastic experience at Ledwood Engineering. They were given lots of advice by industry experts on the different career options and pathways within the engineering sector.
“They appreciated the opportunity to ask their questions and found the session very informative. Having the chance to trial their welding skills on the simulator was an experience they continue to talk about and has definitely piqued their interest.”
Poppy Sawyer, Year 8 SPARC learner added: ‘It was a really good trip. Talking to the different people there has helped me know more about the jobs we could get which will be very useful when making choices for my future.”
“They helped us a lot by giving us lots of information. We were able to look around and try welding. It was really fun,” added Tianna Marshall, Year 8 SPARC learner.
The Regional Learning and Skills Partnership also launched its Explore Engineering interactive website at the event.
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