Real Estate Development in the Floodplains: A Builder’s Guide

real estate guide

Recent reports indicate that the UK is going to see more flooding in the coming years, attributed mainly to climate change the region has witnessed in the past decades. While experts on climate change advise that builders and developers should not refrain from building new homes and commercial sites on floodplains, homebuyers, local councils, real estate companies and other stakeholders should be made aware of the risks of building and living in flood-prone areas.

Opportunity in developing real estate in flood-hit areas

Developers and builders seem to prefer building on floodplains despite the risk, for the simple reason that the land there is flat, which makes construction much easier. Add to it the proximity to public utilities and floodplains make for an ideal site to build housing to bridge the large gap between demand and supply of homes in the UK.

Homebuyers and investors continue to purchase homes in areas that have seen massive floods, potentially for two major reasons. One is the dramatic though short-lived fall in property prices at such locations. The other is that homebuyers tend to consider heavy flooding a rare event and those who find the pricing attractive are determined to look for ways to flood-proof their homes. People who want to live near a waterbody are willing to take chances and plan ahead by covering any potential damage via flood insurance.

Real estate in floodplains is therefore a lucrative market for both real estate agents and investors. As national average rainfall data can no longer be used to accurately predict local flooding, real estate companies need new methods to carry out risk assessments of locations of interest. If you are intending to develop housing or commercial buildings in the floodplains, a wise first step would be  to study the area using in-depth and detailed flood maps provided by a trusted mapping service such as http://www.promap.co.uk/.

Benefits of flood-proofing for real estate entrepreneurs

Whether you buy and sell residential property for a living or like to invest in homes and rent them out, flood-proofing a property located in a flood-prone locality is not a choice but a necessity. It will not only minimize damage in the event of a flood, it also enhances the overall value of your property against similar homes that do not have flood protection.

Simple steps such as flood-proofing doors and windows; replacing carpeting with stone or wooden flooring; and fortifying the roof, façade, pathway and driveway of your home can go a long way in getting buyers and tenants interested in your property.

It’s also a good idea to contact the local environment office and seek information on ongoing or upcoming measures to improve flood protection for your locality.

Flood-resistant construction

New-age developers and builders need to be aware of the latest advancements in construction practices for building in flood-prone locations. Hiring a contractor who has the experience and expertise to build flood-resistant housing is crucial, as is working with architects and designers well-versed in the art and science of developing real estate on floodplains. For instance, it is important to use construction materials that can withstand flooding—that is, concrete and masonry—to minimize damage from water. At the same time, not every component of a home can be built with concrete, so builders need to come up with out-of-the-box solutions to safeguard property against flooding, as follows:

  • Design the housing unit in such a way that keeps living areas out of harm’s way—for instance, build living room and bedrooms on the first floor and use ground floor for garage, storage, and so forth.
  • Use flood-resistant internal finishing (paint, flooring, plasterwork, etc.).
  • Build the house on a solid foundation made of concrete that is engineered to move upward as flooding occurs and then returns to its original position as flood water recedes.
  • Build the lowest floor level of the house higher than the estimated flood water levels.

Safeguarding your real estate investment with flood insurance

If you already have a property portfolio in the floodplains or are planning to purchase housing or land in high-risk areas, buying flood insurance is a key element in safeguarding your real estate investment.

Protecting a home or commercial building with adequate insurance cover not only safeguards the structure and helps minimize potential losses, it also enhances the building’s resale value should you want to sell it in the near future. Do know, however, that in the absence of adequate government-sponsored flood defenses, flood insurance becomes all the more expensive and may drive up your yearly maintenance/operational costs significantly.

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