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Could climate change impact your mortgage application?

From flooding to coastal erosion – some properties are more at risk from climate change than others. But what does it mean for your mortgage?

Many lenders are now considering the risks associated with the impacts of climate change when deciding whether to lend against a property. 

Here, we look at what lenders, including HSBC UK, may consider when deciding whether a property offers suitable security for a mortgage.

How could property be affected by climate change?


According to the Environment Agency, the UK is experiencing more frequent flooding, leaving millions of properties at risk in England alone. 

When purchasing a property, your solicitor or licensed conveyancer may carry out an environmental search to check for any issues with flooding that might affect the property’s value. You can also check a property’s flood risk on GOV.UK

If you have specific questions about flooding, you can visit the National Flood Forum website – a charity set up to help people who live in areas at risk of flooding. 

You can also get support from the Flood Re scheme – a scheme set up between the government and insurers. Its aim is to make the flood cover part of home insurance more affordable.

Coastal erosion

Coastal erosion is the loss or movement of land due to wind, waves, and tides. 

With extreme weather and rising sea levels, more properties could be at risk of losing their full value due to coastal erosion.


A landslide is the movement of rock, debris, or soil down a slope. It’s caused by various things, including heavy rainfall or drought, which makes the land unstable. 

If this is happening on or near the property, you need to let your mortgage lender and insurance company know. 

You should seek specialist advice from a structural surveyor or geologist – especially if you’re planning to start major building or drainage work.

Subsidence and sinkholes

Subsidence and sinkholes occur when the ground below a property cave in or sinks, reducing the value of property and land. 

Soil expands in wet weather and contracts in dry weather. With the UK expected to see wetter winters and drier summers, the soil beneath our homes can become unstable.

Properties built near large trees (where the roots disturb the soil) or on top of old mining quarries, may be at risk to subsidence and sinkholes. When purchasing a property, your solicitor or licensed conveyancer will advise you whether a mining search is needed. 

How could climate change affect my mortgage application?

When you apply for a mortgage, your lender will arrange a valuation of the property for mortgage purposes. This valuation confirms to the lender whether the property value can support the mortgage amount requested.

At the same time, some lenders are now completing further checks to assess whether a property is at risk due to climate change and whether they will lend against that property.

As a result, it can be harder to get a mortgage on a property that’s at a ‘high risk’ of being impacted by climate change – especially if you’re unable to insure it due to flooding or the land being unstable, for example. 

What you can do before you apply for a mortgage

Before you apply for a mortgage or home loan, if you’re concerned that the property could be at risk of climate change, you may want to instruct a surveyor to complete an in-depth survey.

If your lender considers the property to be at risk from the effects of climate change, they may decline your application or ask you to confirm you have suitable cover in place. 

Most lenders, including HSBC UK, request that you take out and maintain buildings insurance for the term of the mortgage. 

You may need to provide evidence of your insurance each year until you repay your mortgage.