London Faces Record Subsidence Claims as Heatwaves Dry Out Clay Soil

Five successive heatwaves have dried the London clay on which much of the capital sits, triggering a surge in foundation shrink-swell. The Association of British Insurers (ABI) reports that subsidence-related insurance claims hit a record in the last quarter, with households averaging £20,000 per claim – a 15 % rise from the same period in 2025. Over the four years through 2025, total payouts rose roughly 90 % to £297 million. The most vulnerable properties are Victorian and Edwardian homes built directly on the upper clay layers; modern office towers in the City and Canary Wharf, with deeper foundations, are less exposed.

Bloomberg

London’s clay expands when wet and contracts when dry, a behavior amplified by prolonged drought and extreme heat. The British Geological Survey (BGS) projects that, under the RCP 4.5 emissions scenario aligned with current climate policies, 1.8 million UK homes (about 5 % of the national housing stock) are “highly likely or extremely likely” to experience subsidence by 2070. A higher-emissions pathway raises that figure to 4.2 million homes (11 %). Densely populated areas of London, Kent and the southeast are identified as the hotspots.

Bloomberg

The Federation of Master Builders estimates subsidence can cut property values by 20-25 %. Repair costs for underpinning range from £20,000 to over £100,000. London Mayor Sadiq Khan warns that the city may need private investment to meet an annual climate-adaptation bill of up to £36 billion into the 2050s. Deloitte partner Cherry Chan describes subsidence as an “increasingly material climate-related risk” for insurers, who could face heightened losses in 2026 and beyond.

Bloomberg

Laura Hughes, head of general insurance at the ABI, said the upward trend is likely to continue, noting that “the impact that climate change is having is undeniable.” — *see Verbatim Quotes*.

South China Morning Post

Geobear CEO Otso Lahtinen describes the surge in homeowner inquiries as “the new norm,” adding that the trend “cannot be ignored” for anyone buying, selling, or trading property.

Bloomberg

Mayor Khan’s office emphasizes the need for private capital to fund adaptation measures, citing the projected £36 billion annual cost.

Bloomberg

• “The impact that climate change is having is undeniable,” — Laura Hughes — Laura Hughes, head of general insurance, Association of British Insurers.

Bloomberg