Around one in seven mortgages in England are on homes in postcodes with some  degree of flood risk, according to new analysis from the Financial Conduct Authority.

The regulator puts the figure at almost 16%, with exposure varying significantly by region and type of flooding.

High-risk exposure to surface-water flooding is concentrated in and around London, with Essex recording the highest proportion of mortgage postcodes in the high-risk category at 6.5%.

Overall surface-water exposure was highest in Inner London West, where 24% of mortgage postcodes analysed fell into a flood-risk category, followed by Inner London East at 21% and Outer London West and North West at 19%.

Exposure to flooding from rivers and the sea was highest in Lincolnshire and East Yorkshire, where 8.5% and 7.7% of mortgage postcodes respectively fell within the medium and high-risk categories.

The FCA explored whether there was any correlation between LTV and flood risk but found no consistent relationship between those factors.

The regulator says its analysis is designed to show the broad exposure of mortgage lending to climate-related risks rather than assess individual properties.

It mapped mortgage postcode locations against Environment Agency flood-risk data covering rivers, the sea and surface water.

Broadstone senior director Richard Pinch says: “The scale of flood risk across England’s mortgage market raises serious concerns for homeowners who could see their properties become harder to insure or sell, and lenders facing increasing financial risks across their mortgage portfolios.

“For homeowners, the consequences of flood risk can be severe, from soaring insurance premiums and falling property values to difficulties remortgaging or selling. In the worst cases, households could find themselves trapped in properties that are increasingly difficult to insure or finance.

“Flood risk also presents a significant challenge for mortgage lenders, threatening property valuations and potentially eroding the value of the security backing their loans.

“The challenge will be managing these risks without restricting access to mortgage finance in flood-prone areas.

“More sophisticated climate risk modelling, stronger flood defences and closer collaboration between lenders and insurers will be critical to protecting both borrowers and the wider mortgage market.”