The Intermediary – August 2026 - Flipbook - Page 11
RESIDENTIAL
Opinion
Climate change is
making valuations
more complex
F
or years, complexity in
residential valuation has
been easy to recognise.
Listed buildings, houses
in multiple occupation
(HMOs), non-standard
construction and large property
portfolios have long demanded
additional scrutiny from surveyors
and lenders alike.
Climate change is rewriting that
definition. Increasingly, ordinary
homes are presenting complex
valuation questions, not because the
buildings have changed but because
the risks lying beneath them have.
Subsidence has always been a
technical issue requiring careful
investigation and professional
judgement. Today, it has become
something far bigger. Climate
change, an ageing housing stock and
rising claims costs are transforming
subsidence into one of the defining
property risks of this decade.
The latest ABI figures demonstrate
the scale of the challenge. During
Q2 2026, UK insurers paid £72m
in domestic subsidence claims,
while the average claim reached a
record £20,000.
Earlier in the year, the average claim
had already risen to £17,820, a 9%
increase on the previous year. These
are not isolated spikes – they reflect
a broader trend of increasing claim
severity as weather paerns become
more extreme. The two are moving
hand in hand.
Much of the UK’s housing stock sits
on shrinkable clay soils. Extended
periods of hot, dry weather cause these
soils to lose moisture and contract,
placing pressure on foundations.
When heavy rainfall follows, the
ground expands again. Repeated
cycles of such movement increase
the likelihood of structural damage,
particularly in older homes built
for a different climate than we’re
currently experiencing.
Tree-related moisture extraction,
drainage failures and existing
structural weaknesses remain
important contributors, but climate is
increasingly acting as the factor that
amplifies those underlying risks.
For lenders, this has implications
well beyond insurance claims.
As environmental risks increase,
understanding the long-term
resilience of a property is becoming
an increasingly important part of
assessing lending risk. Valuations are
no longer simply about establishing
today’s market value. They also
contribute to understanding how a
property may perform as security over
the lifetime of a mortgage.
Professional judgement has
always been fundamental to
identifying structural movement,
but expectations are evolving.
Surveyors are expected to draw on a
much broader range of information.
Geological mapping, climate data and
property intelligence is becoming an
essential part of modern residential
risk assessment.
Rising to the challenge
Technology is undoubtedly playing an
increasingly important role. Advances
in data, automation and artificial
intelligence (AI) are providing
surveyors with richer information
than ever before, helping identify
paerns and risks that may have been
overlooked. However, technology
should always enhance and not replace
expert judgement.
A desktop assessment supported
by high-quality data may be entirely
appropriate for one property, while
another may require a physical
inspection because the underlying
REBECCA FREEMAN
is risk director, Legal & General
Surveying Services
Climate resilience
is no longer a niche
consideration. It is part of
mainstream lending risk”
risk profile is materially different.
The challenge is not deciding between
technology and human expertise.
It is understanding when each is
most appropriate.
For organisations operating across
residential valuation, this presents
both a challenge and an opportunity.
Those that combine experienced
surveyors with robust governance,
high-quality data and intelligent
decision-making will be beer placed
to support lenders as environmental
risks continue to evolve.
Climate resilience is no longer
a niche consideration. It is part of
mainstream lending risk.
The challenge is no longer simply
identifying cracks in a property.
It is understanding how climate,
geology, construction methods and
environmental conditions interact to
influence the long-term performance
of residential assets.
That is why subsidence should
no longer be viewed solely as a
structural defect. It is a strategic risk
that demands a coordinated response
from lenders, insurers, surveyors and
policymakers. Those who recognise
this shi now will be beer prepared
to protect property assets, improve
customer outcomes and build greater
resilience for the future. ●
August 2026 | The Intermediary
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