Wherever you are in the world, this summer has been marked by extreme weather events. Not least the floods in Pakistan, which have left one-third of the country underwater, damaged or destroyed over a million homes and killed more than 1200 people. In the UK and Europe, a lack of water is the most pressing problem. When the rains do come, however, the risk of flooding will be pronounced as the bone-dry earth struggles to absorb the torrential downpours that are becoming increasingly frequent.
Scientific research shows that extreme weather events will only get worse and more common as climate change pushes up global temperatures. Banks are more aware of climate risk than ever before, but few are taking flood risk into consideration when analysing mortgage applications. If this omission continues, it will have negative consequences for financial institutions and householders.
