The impact of flooding on property prices: a repeat-sales approach

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Abstract

In this paper we use a repeat-sales model to analyse the price path of properties affected by flooding in England between 1995 and 2014. Our dataset contains information on 4.8 million houses with at least one repeat-sale. This database is merged with high-definition GIS data delineating the spatial extent of all recorded flood incidents in England covering a total area of 2,654km2. Our results show that immediately after a flood event the price of property in a postcode entirely inundated by inland flooding is on average 24.9% lower than non-flooded property, whereas for property in a postcode entirely inundated by coastal flooding the price reduction is 21.1%. Nonetheless, we find that this discount is short-lived and the discount is no longer statistically significant for properties affected by inland flooding after 5 years, which falls to just 4 years for properties affected by coastal flooding. For lower-priced properties however, the post-flood price discount can be observed up to 6-7 years for both inland and coastal flooding. The magnitude of the impact also depends on the characteristics of the properties, the characteristics of the flood and the existence of flood protection assets.

Details

Original languageEnglish
Pages (from-to)62-86
Number of pages25
JournalJournal of Environmental Economics and Management
Volume95
Early online date6 Mar 2019
Publication statusPublished - May 2019

Keywords

  • Flood risk, Hedonic valuation, House prices, Repeat-sales