Nationwide reported to stop lending on some high flood risk properties

Nationwide Building Society, the UK's second largest mortgage provider, is reported to be stopping lending on properties at a high risk of flooding, according to a Welsh Government report on insurance and Flood Re published on 17 March 2025¹. The report, an evaluation of the Flood Re insurance initiative by the Wales Flood and Coastal Erosion Committee, states that "there are reports the UK's second largest mortgage provider, the Nationwide Building Society, are stopping lending on properties at a high risk of flooding"¹. The report does not name the mapping technology involved, and no announcement by Nationwide itself is cited in it¹.

The report sets the lending report against the wider flood insurance picture. Flood Re launched in 2016 as a government-industry partnership under the Water Act 2014, and has the explicit aim, described in the report as a statutory responsibility, of restoring an effective insurance free market over a temporary 25-year life span¹. It is only available to households in properties built before 2009, and excludes certain leasehold and all commercial properties, as well as coastal flooding risk¹. The report says more households at risk of flooding are claimed to be able to access multiple insurance quotes because of Flood Re, from 1% in early 2016 to 93%¹.

The report also records limits on the scheme. It says Flood Re does not cover buildings insurance for a block of more than three leasehold flats, and that its reinsurance rates are based on Council Tax Bands, "as a proxy to reflect the householder's ability to pay rather than reflecting the risk faced by the property"¹. A levy is paid by all insurers, with costs passed on through increased premiums to all household insurance policies¹. The report cites detailed evidence of 800,000 properties in Britain at risk of flooding yet ineligible for the scheme, 70,000 of them at high risk¹.

On resilience measures, the report says that from 2021 insurance claim payments have been permitted to include an element of "resistant and resilient repair, above and beyond the loss" under Flood Re's Build Back Better strategy, with householders able to access funds up to the value of £10,000 to install property level protection measures as part of repairs after a flood¹. It notes that eligibility varies by insurer, quoting Flood Re's own answers that each insurer has a different initiative and sets its own limit¹.

Why it matters for households

For anyone buying or remortgaging a home in an area mapped as high flood risk, the reported change affects whether a mortgage is available at all, not just what it costs. A declined mortgage application can stop a purchase, and a lender's flood mapping may not match the Environment Agency or Natural Resources Wales flood zones, or an individual insurer's view of the same property. The report does not say which properties, which areas or which mapping product are affected, and Nationwide has not been reported as confirming the position¹.

The insurance side matters alongside the mortgage. Flood Re covers properties built before 2009 only, so homes built from 2009 onwards sit outside it, as do blocks of more than three leasehold flats, commercial properties and coastal flooding risk¹. Where a property is ineligible, cover and pricing depend on the individual insurer. The report also notes a lack of data in Wales on insurance coverage levels, premium prices, successful claims and pay-out times, beyond Flood Re's own access-to-quotes figures¹.

What happens next

The report states that Flood Re has a statutory aim to restore an effective insurance free market over a temporary 25-year life span, and that this necessitates a managed transition to risk reflective premium prices by 2039¹. It also records that the results of a Welsh Government review of property flood resilience had not been made public at the time of writing¹. No timetable for any change to Nationwide's lending position is given in the report¹.

For background on lenders and mortgages, including how building societies differ from banks, see our guides to Nationwide Building Society and bank or building society for a mortgage.