According to data from the Association of British Insurers, as reported in Bloomberg Green, London real estate is cracking under heat, literally. Five consecutive heat waves this summer dried out the clay soil beneath much of the city, pushing subsidence insurance claims to a record high last quarter. Average claims hit £20,000, up 15% from a year earlier, a stark example of physical climate risk already showing up in homeowners’ insurance bills.
The damage isn’t isolated. UK subsidence payouts have climbed roughly 90% over the past four years, to a record £297 million, and some of the hardest-hit areas are London’s priciest, including Westminster and Kensington and Chelsea. A subsidence event can knock 20-25% off a home’s value, per the Federation of Master Builders, underscoring how extreme heat is becoming a measurable cost for homeowners, not just a distant scenario.
[Source: Bloomberg Green]