Climate Change: Housing Insurability, Mortgage Lending and Financial Resilience

Baroness Northover Excerpts

Monday 13th July 2026 Lords Chamber

Asked by

[Baroness Northover]

To ask His Majesty’s Government what assessment they have made of the long-term implications of climate change and nature loss for housing insurability, mortgage lending and household financial resilience.

[The Financial Secretary to the Treasury (Lord Livermore) (Lab)]

My Lords, climate change clearly poses a long-term risk to financial stability and household resilience. The Government’s remit to the Financial Policy Committee ensures that it considers climate-related risks as relevant to its primary objective of maintaining financial stability. The Climate Change Committee’s recent report identified declining insurability and reduced mortgage access as credible risks, and the Government will reflect this evidence as they prepare the fourth national adaptation programme.

[Baroness Northover (LD)]

I thank the Minister for that reply. I hope he has read the adaptation report of the Climate Change Committee, in which it warns very clearly about the effects of increased flood and wildfire risk to the financial sector and the economy more generally. The Minister will remember the effect of the US subprime market on the UK economy from 2008 onwards. In the UK we can already see that property values, insurance availability and mortgage lending are all affected by climate change. Can he give further details as to how urgently the Government are addressing these risks?

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her Question. I am very conscious that she is far more expert in these matters than I am. As she knows, the independent Climate Change Committee has made recommendations on the preparedness of the UK for current or future climate change risks. The Government will consider these recommendations as part of the next national adaptation programme.

The noble Baroness mentioned households and mortgages. The Bank of England’s assessment suggested that it would take a severe shock to borrowing costs, household incomes or the cost of essential goods to put aggregate debt servicing under pressure. The Government do not expect climate change to have an immediate impact on mortgages or household resilience, though they recognise the long-term pressures that climate change could have on a property’s value, insurability or suitability as security for mortgage lending. The Government will, of course, continue to work with industry to address any market failures.