FD2623 - Changes in Asset Values on Eroding Coasts

Theme:Strategy and Policy Development
Project status:Completed
Start date:30/09/2008
End date:19/12/2008
Keywords:
  • Environmental Protection,
  • Flood and Coastal Defence,
  • Risk,
  • Land,
  • Flood Management,
  • Coastal Defence
Contractor:
  • Risk and Policy Analysts Ltd
Contact:

PROJECT SUMMARY

PROJECT CLOSING STATEMENT
It is difficult to precisely define how the erosion curve (the relationship between the at risk property value and time remaining) may relate to a theoretical depreciation curve. Factors, such as premiums paid for sea views may mask the effect of property value reductions such that the erosion curve could lie above the depreciation curve. This is more likely in a strong market. In a weak market, the erosion curve could lie significantly below the depreciation curve.

Overall, the combined (and potentially conflicting) result of all the factors affecting property values is that a decision to withdraw funding could (where the negative factors predominate) result in a significant property price reduction.

SUMMARY OBJECTIVES
The objective of the study is to provide information and analysis that will help in the understanding of how property prices respond to coastal erosion risk. The study considers two specific contexts: where there has never been a defence and where there has been a decision to withdraw public investment from publicly funded coast protection works.

The aim of the study is to answer two overall study questions:

1. How do asset values respond to coastal erosion risk?
2. How do asset values in England respond to coastal erosion risk and in particular to a decision to withdraw investment in publicly funded coast protection works?

KEY CUSTOMER PURPOSE
It is difficult to precisely define how the erosion curve (the relationship between the at risk property value and time remaining) may relate to a theoretical depreciation curve. Factors, such as premiums paid for sea views may mask the effect of property value reductions such that the erosion curve could lie above the depreciation curve. This is more likely in a strong market. In a weak market, the erosion curve could lie significantly below the depreciation curve.