Nationwide, the world's largest building society, decided to stop lending to some flood-risk properties in the United Kingdom. The cooperative financial institution's head of property risk, Rob Stevens, confirmed this. 

Experts said that the statements he shared during an interview could spark new debates regarding the possible outcomes if the UK's subsidized flood insurance scheme ends within 15 years.

Nationwide's Stop Lending Some UK Flood-Risk Properties

The Guardian reported that the weather-related home insurance claims in 2023 reached over $700 million. Flood-related home insurance claims covered around 50% of the total bill.

Because of this, Nationwide decided to stop granting mortgages on some houses and other properties in areas with high risk of flooding. However, the building society clarified that this decision only affects a very limited number of homes.

Banks could follow suit, especially since weather-related claims on home insurance in the United Kingdom drastically increased.

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Rising Mortgage Rates in the UK

According to BBC News, Nationwide, NatWest, and Santander announced they'll increase rates on new fixed deal mortgages on Tuesday, Apr. 30.

Their announcement came after rival lenders made the same move a few days ago. However, experts said that rising mortgage rates could still change.

"This is not one-way traffic and could change again soon," said David Hollingworth from L&C Mortgages.

"Many people expected the cost of fixed rates to drop rather than increase and these higher rates do put people off buying. It would not be a surprise to see more banks and building societies raising rates this week," explained Trinity Financial's Aaron Strutt.

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