Can you get equity release if you live in a flood area?

As climate change starts to have a greater impact on our environment, many homeowners are finding that homes are more at risk of flooding than they were 10 or 20 years ago. Being at risk of flooding can have an impact on property prices and increase insurance costs, but for older homeowners looking to release equity from their home, it can also impact getting an equity release deal.

According to the Met Office, the UK is getting wetter and the highest rainfall totals over a five-day period were 4% higher between 2008 and 2017, compared to 1961 to 1990. In addition to this, the amount of rain from extremely wet days increased by 17% when comparing the same periods. The increase in rainfall and, subsequently, increase in the possibility of flooding, means that not only are homeowners living close to rivers, streams and lakes likely to be at risk of flooding, but there is also the risk of flooding from saturated ground.

In common with all residential mortgage lending, lifetime mortgages are secured on the homeowners property and equity release providers will take into account any flood risk when deciding whether or not to offer a lifetime mortgage and on what terms. Homeowners should be aware that it is not just those who have already been impacted by flooding but also those who are at risk of future flooding. The level of flood risk of a property can be found out using the Government’s website.

Although there is not much a homeowner can do to reduce the risk of their property being flooded, they can improve their chances of getting a deal by applying to a provider more likely to accept applications from flood risk areas. An equity release broker will be able to provide help and advice on which providers are more likely to accept those looking to release equity from a property in a flood risk area.

For homeowners living in a flood risk area, just because they are likely to get an equity release deal does not mean it is necessarily the right option for them. A more limited choice of products may be available to them and as is always the case the financial benefits of releasing equity from their home will depend on individual circumstances. As such, homeowners living in a flood risk area should consider getting independent financial advice before applying for equity release to ensure that it is the right option for them.