The impact of flood insurance on residential property prices: Towards a new theoretical framework for the United Kingdom market

Lamond, Jessica; Proverbs, David; Antwi, Adarkwah

doi:10.1108/13664380780001099

Cited by 8 publications

(8 citation statements)

References 22 publications

(17 reference statements)

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“…They have been applied extensively in the Australia, Europe and the United States. For example, Palmquist and Danielson (1989) applied the HPM in their agricultural land studies in the United States, meanwhile Lamond, Proverbs and Antwi (2007) applied the repeat-sales method in their property studies in the United Kingdom. Even though both the HPM and repeat-sales method used to estimates property price to measure the value of property on particular attributes but the application of both methods differs.…”

Section: Reviews Of Relevant Literaturesmentioning

confidence: 99%

Flood and Land Property Values

Ismail¹,

Karim²,

Basri³

2016

ASS

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Flood disaster has become a natural concern to the land owners where it raised a critical issue in term of land value depreciation. Previous studies have discussed the issue of potential decline in the value of land which are located on the flood-liable area. However, in Malaysia, current studies on flood impact are considered limited and do not focus on the effects of flood on land property. With the Hedonic Pricing Model (HPM) approach, we investigate the effect of flood on agricultural and industrial land property values in the urban and rural areas in Malaysia. The analysis indicates that the agricultural and industrial land values in the urban and rural areas have significantly decreased due to flood events. This study will benefit the land owners to understand the flood impact on land value and also the factors that contribute to the loss in the land value. It becomes the responsibility of the land owner to put the asset and property to its best use, given the presence of the flood. In addition, this study will help the policy maker to design and allocate land development efficiently in the urban or rural areas for agricultural and industrial project to ensure depreciation value of the land is minimized in the case of flood.

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Section: Reviews Of Relevant Literaturesmentioning

confidence: 99%

Flood and Land Property Values

Ismail¹,

Karim²,

Basri³

2016

ASS

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“…This is because a majority of home Concept of CBA to PLFRA measures insurance policies in the UK are policies of indemnity (Lamond et al, 2007). However, the framework has the potential to be developed for retrofit and new build.…”

Section: Additional Costs Based On Different Plfra Measures (Cm)mentioning

confidence: 99%

“…The model derived the benefits of flood resilience measures from the difference in the cost of repair with and without the measures after a flood as estimated by ABI (2003). The ABI data assumes a financial scenario (individual's perspective), not an economic one (national perspective) as when a property is flooded the insurance provider takes the responsibility to replace/renew the property to its pre-flooded condition (Lamond et al, 2007). However, the intangible benefits were not accounted for in the model, thereby making the model less robust.…”

Section: Thurston Et Al (2008) Cba Modelmentioning

confidence: 99%

Application of the concept of cost benefits analysis (CBA) to property level flood risk adaptation measures

et al. 2014

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Purpose -There has been a significant increase in flooding in the UK over the past ten years. During this time, Government policy has moved from investment in flood defences towards encouraging property owners to take responsibility for reducing the impact of flooding. One of the ways in which this can be achieved is for homeowners to adapt their properties to flood risk by implementing property level flood risk adaptation (PLFRA) measures. While there has been some attempt to develop an understanding of the benefits of such measures, these previous studies have their limitations in that the intangible benefits have not been fully considered. As such, there remains a need for further development of these studies towards developing a more comprehensive understanding of PLFRA measures. It is against this background the purpose of this paper is to present a conceptual cost benefit analysis (CBA) framework for PLFRA measure. This framework brings together the key parameters of the costs and benefits of adapting properties to flood risk including the intangible benefits, which have so far been overlooked in previous studies. Design/methodology/approach -A critical review of the standard methods and existing CBA models of PLFRA measures was undertaken. A synthesis of this literature and the literature on the nature of flooding and measures to reduce and eliminate their impacts provides the basis for the development of a conceptual framework of the costs and benefits of PLFRA measures. Within the developed framework, particular emphasis is placed on the intangible impacts, as these have largely been excluded from previous studies in the domain of PLFRA measures. Findings -The framework provides a systematic way of assessing the costs and benefits of PLFRA measures. A unique feature of the framework is the inclusion of intangible impacts, such as anxiety and ill health, which are known to be difficult to measure. The study proposes to implement one of the stated preference methods (SPM) of valuation to measure these impacts, known as the willingness to pay method, as part of a survey of homeowners. The inclusion of these intangible impacts provides the potential to develop a more comprehensive understanding of the benefit cost ratio (BCR) for different stakeholders. The newly developed CBA conceptual framework includes four principal components: the tangible benefits to insurers; the tangible benefits to the government; the tangible benefits to homeowners; and the intangible benefits to homeowners. Originality/value -This tool offers the potential to support government policy concerned with increasing the uptake of PLFRA measures through increasing the information available to homeowners and thereby supporting the decision-making process.

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“…The issues for the professional valuer is how to correctly identify the impact of flood and how to include these into valuation report [10]. The literature indicates the difficulties in assessing flood damages because of the lack of knowledge amongst valuer [25].…”

Section: Problem Statementmentioning

confidence: 99%

A Conceptual Framework of Determining the Property Value Using Economic Valuation Method Towards Floods Disaster

Zulkarnain¹,

Yuzir²,

Razali³

2018

Proceedings of the 1st Economics and Business International Conference 2017 (EBIC 2017)

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The purpose of this paper is to inform a conceptual framework of economic valuation towards floods disaster. The existing pattern, themes and issues associated with economic of valuation towards flooding were identified and used to inform the conceptual framework. The review approach was based on related literature contributing to identify themes as-floods disaster‖ and-property value‖. The generic conceptual framework presented explores the interaction between different internal and external factors affecting the economic value of properties. An extensive review of previous studies in economic valuation of property for different floods disaster studies considered to be main restrictive factor resulting in lack of empirical studies in this field. Practitioners and researchers will find this study useful in developing an improved understanding of the economic valuation to flooding. The conceptual framework is important outcome of the research which will encourage further research in this area of study.

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The impact of flood insurance on residential property prices: Towards a new theoretical framework for the United Kingdom market

Cited by 8 publications

References 22 publications

Flood and Land Property Values

Flood and Land Property Values

Application of the concept of cost benefits analysis (CBA) to property level flood risk adaptation measures

A Conceptual Framework of Determining the Property Value Using Economic Valuation Method Towards Floods Disaster

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