Mortgage assessment

Building society signs up for flood risk analysis

Ballater flood youtube

Ballater has been hit by bad flooding in recent years

Scottish Building Society has embarked on a ground-breaking partnership with European climate change analysts Ambiental to assess flood risks in more than £400 million of its mortgaged properties.

Ambiental estimates that an additional 1.2million properties across the UK could be at a risk of flooding by 2050 because of global warming.

The modelling work draws on Ambiental’s predictive analytics, machine learning and expertise to forecast risks to SBS’s portfolio for up to 50 years.

Given that 35% of UK households have property debt, and the average value of a mortgage in the UK is £137,000, this means £60 billion in mortgage debt could be impaired due to climate induced flooding alone.

Paul Denton, chief executive of SBS, said: “In the build-up to COP26 in Glasgow, climate change is very much front of mind.

“As the world’s oldest building society, with 173 years of history behind us, it is important to ensure that we have a sustainable business for the next 173 years.

Paul Denton and Justin Butler

“We are delighted to partner with Ambiental, a world leader in the field. Their predictive technology, combined with expert analysis, models the risk of different climate change scenarios on our £400m mortgage portfolio, whether from flooding or coastal erosion.”

New guidelines to be introduced by the Bank of England require the finance sector to better analyse and disclose climate change risks.

Flood losses in Europe are expected to increase fivefold by 2050, according to the European Environment Agency.


Ambiental looked at every property on the Society’s books to build up a picture of current risks and then future risks over a 10-50 year timescale, based on different levels of carbon in the atmosphere and their impact on climate.

Justin Butler, CEO of Ambiental, said: “As the risk of flooding increases and the impact of flood events becomes more severe, organisations need new ways to see and manage their risks.

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