In this brief guide, we are going to discuss buying a house in flood zone 2.

What is flood zone 2?

Flood zone 2 essentially marks the risk of flood in a particular area. This mark is given by the environmental agency and you can see where your property sits by viewing the flood zone map which is regularly updated by the environmental agency.

You simply have to put in your current postcode or the postcode of the flood zone 2 house which you want to buy.

A house in a flood zone 2 area has a 1 in 1000 chance to be hit by a major flood each year if there are no major defenses.

1 in 6 homes in the UK is at risk of flooding so it is very much a serious problem.

Types of flood zones

Flood Zone 1: Low probability

1 in 1,000 annual probability of river or sea flooding.

Flood Zone 2: Medium probability

1 in 200 and 1 in 1,000 annual probability of sea flooding.

Flood Zone 3a: High probability

in 200 or greater annual probability of sea flooding.

Flood Zone 3b: The functional floodplain

This zone comprises land where water has to flow or be stored in times of flood.

What are the main causes of flooding?

Flooding usually happens when a local river bursts its banks or high tide causes the water levels to rise. Even if you are not closed to the see “surface water flooding” could occur.

Groundwater flooding could also cause the water tables to rise and water will begin to seep into basements and cellars.

Buying a house in flood zone 2

Whilst you can buy a house in a flood 2 zone you should be aware that the mapping system for floods in the UK is not completely accurate. A flood zone 2 sits in-between flood zone 3  which is a very high risk of flood and flood zone 1 which is the lowest risk of flood.

A flood zone 2 property can very much face flood zone 1 conditions or flood zone 3 conditions.

If you are considering buying a house in a flood zone 2 then you should consider how fast the water tables are rising and your proximity to the river.

A flood 2 zone will likely be priced more favourably to other homes which are not in a flood zone but this, of course, depicts the risks of buying a home in such a house.

Before buying a home in a flood risk area you may want to contact a hydrologist or a flood risk specialist who can provide a more detailed assessment of the homes risk to flood and submit this to the mortgage lender as part of your mortgage application

You may also want to gather data on how many times the river in the local area has burst its banks and within how many yards the house has come within flooding.

You should also dig up data on any recent flood alerts or flood warnings in the area and check to see if the property was within the flood warning zone. 

You can use old Satelite images to achieve this.

Buying a house in a flood zone 2 is very much possible but you should consider a few things first:

  • Getting a mortgage will be hard
  • Getting home insurance will be hard
  • Selling the home will be difficult
  • Getting planning permission will be hard

Getting a mortgage will be hard

If you are thinking of buying a house in flood zone 2 then speaking to a mortgage broker and getting an idea of what your mortgage options are may be a good idea.

Before getting a mortgage on a flood zone 2 area you should look to secure adequate home insurance which covers the flood risk to the home if not the mortgage lender will not provide you with a mortgage offer.

A mortgage lender has to be satisfied that your home will be insurable before lending you funds to buy it.

You can also expect to have a limited number of mortgage lenders as some mortgage lenders will not want to lend on homes with a flood zone 2 designations.

This means the mortgage rates on the market to buy a flood zone 2 home may not be as competitive.

To reduce their exposure to the property the mortgage lender may usually request a mortgage deposit of around 25% so their loan to value on the property stays below 75%.

Due to the risks of not being able to sell the property if a home repossession had to take place some mortgage lenders will offer a maximum loan to value rates of 60% .

Getting home insurance will be hard

If you are considering buying a house in flood zone 2 then you should first look to see what the home insurance premiums you could get look like.

When looking to get home insurance on a house you are buying in a flood zone 2 area, you should know that the home insurance company will carry out a very detail search with the various data point and will have data on how often the area has flooded and at what risk the house is to being flooded.

Any recent flooding events in the region will be taken note of and this will all go towards determining what the risk is to the insurer and hence what the premium on your home insurance policy should be.

The home insurance company will want to know how close the property is to water and how many times that water has gotten close to your house.

To get home insurance on a flood zone 2 house you may need a specialist insurance broker.

Most home insurance firms may not even offer you a quote simply because you are buying a house in a flood zone 2 area.

In the end, you will have to accept that if you buy a house in a flood zone 2 area you will have to pay a much higher premium than you would if you bought a home in an area with very minor or no risk of flood.

However there is Flood RE, if you are buying a house ina flood zone 2 area you may want to consider checking if you are eligible for Flood RE by using the tool on their website.

What is Flood RE?

The website states

“Every insurer that offers home insurance in the UK must pay into the Flood Re Scheme. This Levy raises £180m every year that we use to cover the flood risks in home insurance policies.

Flood Re works with insurers behind the scenes. When you buy home insurance cover, your insurer can choose to pass the flood risk element of your policy to us for a fixed price.

If you make a valid claim for flooding, your insurer will pay the claim. Later on, we’ll reimburse that insurer from the Flood Re fund.

In short, you buy home insurance in the usual way. We cover the flood risk and that helps to keep your premiums down.”

Selling the home will be difficult

Selling a home in a flood zone 2 will be very difficult as the risk of flood will reduce the number of buyers who are looking for such a home and may force you to lower the price significantly.

To ensure you are able to convince any prospective buyers you should ensure you keep good records of any:

Flooding damage

cost of repairs after a flood

Any rise in insurance premium

Any assessments from third parties about the flood risk to the area or your home

Getting planning permission will be hard

Getting planning permission on a flood zone 2 house will be a bit harder due to the many structural considerations that need to be taken into account.

Steps you can take if you buy a house in a flood zone 2 area

If you choose to buy a house in a flood zone 2 area then you should accept that at some point the house will flood.

You should focus on limiting the costs to you after it has flooded by:

  • Trying to limit the amount of flood which can affect your home with suitable defences
  • Avoid rugs or carpets for ground floors and basements
  • Avoid having any electrical sockets below eye level
  • Avoid keeping any electricals below waist level and certainly not in the basement.
  • Keep your valuables as high up as possible
  • Fitting non-return valves in the drain can be of help
  • Have stone or wood floors downstairs

FAQs: buying a house in flood zone 2

Is it OK to buy a house in flood zone?

Yes, it is okay to buy a house in a flood zone if you accept the risks of buying such a property.

What is a Flood Zone 2?

Flood Zone 2 has a medium probability of flooding and it is has a 1 in 1000 annual chance of river or sea flooding.

Can you build houses in flood zone 2?

Yes, you can build a house in flood zone 2 but it will require adequate planning for it to get planning permission.

How much does flood zone affect property value?

The flood zone can cut off 10%+ of a properties value. You should be conscious of this when buying a property in a flood risk zone.

Is living in a flood zone bad?

Living in a flood zone is not bad but it may have much higher costs such as the insurance costs and any regular renovations which you may need when a flood strikes.

Can I build in flood zone 3?

Yes, you can build in flood zone 3 but as flood zone 3 has the highest probability of flooding you will need a very good plan in order to get planning permission

What is Zone 3 flood risk?

Flood Zone 3 has the highest probability of flooding. It has a 1 in 100 annual probability of river flooding and a 1 in 200 annual probability of flooding from the sea.

Do I need a flood risk assessment?

If you are buying a house in a flood risk area then it may be worthwhile getting a flood risk assessment. In some cases, the mortgage lender will insist on a flood risk assessment.

Use a mortgage broker

You may want to consider using an independent mortgage broker to get a mortgage when buying a house in flood zone 2.

Mortgage brokers are important as they can access mortgage products from across the whole of the market in some cases. This could be over 11,000 mortgage products. This may have some advantages than going directly to a mortgage lender.

A mortgage broker will look to understand your financial circumstances and then provide recommendations on which mortgage products may be suitable for you.

After giving you these mortgage recommendations, most mortgage brokers will seek your consent to apply for a mortgage in principle. 

This will allow you to shop for your home easier as more estate agents and sellers may take you seriously or it will give you confidence that your remortgage is indeed a possibility before you make a full mortgage application. 

Once you have found a home you want to buy or are satisfied with the mortgage offer for your remortgage then the mortgage broker will then look to get you a mortgage offer.

This will come with a key facts illustration document which details out the features of your mortgage including how much you will pay per month if there are any limits such as early repayment fees, or annual overpayment limits.

If you are happy with everything you can then go on to secure your mortgage with the help of a conveyancer. Your conveyancer will manage the legal searches on the property to ensure there aren’t any issues with it, they will oversee the sales agreement to ensure it is in your best interest, they will manage the transfer of mortgage funds, exchange contracts with the seller or their conveyancer and set a completion date with the seller or their conveyancer.

In this brief guide, we discussed buying a house in flood zone 2.

If you have any questions or comments please let us know.

John Bate

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.