Sedgwick identifies key warning signs for UK property market ahead of winter storms

New report leverages years of Sedgwick data and expertise to highlight how companies can navigate the convergence of extreme weather, contractor shortages, and rising costs

LONDON – The UK property market could face increasing pressure on its ability to respond to major weather events as climate exposure converges with contractor shortages, rising repair costs, and widespread underinsurance, according to new analysis from Sedgwick.

Sedgwick’s 2026 Property Damage and Repair Sector report, chapter one, The El Niño stress test – climate, capacity, and the future of property repairs, examines how a strong El Niño could apply pressure across the UK property repair market and test the resilience of organisations with significant property portfolios.

Drawing on Sedgwick’s experience of managing 16 named storm surge events since winter 2023, the report sets out practical steps to strengthen property resilience, including identifying vulnerable assets, updating rebuild valuations, and securing repair capacity before demand surges.

The report highlights several pressures converging across the property sector:

• Weather exposure: 6.3 million properties in England are currently at risk of flooding from rivers, the sea, or surface water.
• Contractor capacity: 3,948 construction businesses folded in England and Wales in 2025, while 72% of SME repair contractors are currently affected by shortages of skilled tradespeople.
• Underinsurance: Of the properties Sedgwick valued between January and August 2026, 79% were underinsured, rising to 89% for commercial buildings. The properties assessed had a combined value of £3.09 billion.

Together, these pressures highlight the need for property owners to review their surge response plans, contractor capacity, and rebuild valuations before severe weather hits.

“Severe weather puts more than buildings under pressure. When contractors are stretched, repair costs are rising, and insurance values fall short, property owners can face longer disruption and unexpected costs. Preparing now means knowing which assets are most vulnerable, checking rebuild values, and confirming that repair partners have the capacity to respond,” said Keith Walters, Director, Sedgwick Repair Solutions.

Climate pressure meets property vulnerability

Building age, construction, occupancy, and use can affect repair complexity, reinstatement time, and cost. Residential portfolios can face high-volume disruption, while commercial properties carry significant reinstatement and business interruption exposures. Public-sector and specialist properties can involve additional duty-of-care, technical, and regulatory considerations.

“Portfolio resilience is determined before a loss occurs. Owners must understand how building age, construction, occupancy, and repair complexity vary across their estate to prioritise investment, protect repair capacity, and recover faster when disruption hits,” said Graeme Mutch, Client Director, Sedgwick.

Rising repair costs increase the pressure

Sedgwick Repair Solutions’ data shows that the cost pressures affecting repairs vary significantly according to the type of loss.

Sedgwick’s Q2 Building Cost Review found rising material prices were adding pressure to repair costs for flood claims.

Flood repairs are exposed to material price increases, with materials accounting for 52.21% of costs in Sedgwick’s Q2 data. Subsidence repairs, by contrast, are heavily labour-dependent, with labour accounting for 72.4% of repair costs.

“The test is whether repair networks can sustain their response when surge demand hits a scaled-back contractor base. By understanding those pressures now, and working closely with contractors, we can protect capacity, control claim costs, and deliver better outcomes,” said Peter Wassell, Technical Director, Sedgwick Repair Solutions.

Repair capacity emerges as a critical vulnerability

The report identifies access to contractors and skilled trades as a central issue in the event of a significant weather surge and argues that the challenge can become acute following a regional weather event where multiple organisations need access to the same labour, skills, and expertise.

“Surge events don’t wait for the market to catch up. Many building contractors have adjusted capacity to match demand, and skills shortages make it harder to scale up quickly. Pre-qualifying restoration and repair partners now means you can activate support, not compete for it,” said Ian Gibbs, National Technical Manager, Sedgwick Repair Solutions.

From insurance risk to property strategy

Sedgwick’s report recommends that property owners map exposures by asset volume and size, maintain current reinstatement values, identify vulnerable properties, align maintenance and regulatory investment, and test access to contractors and specialists before a major event. Evidence of these preparations can also support insurance renewal discussions.

Sedgwick’s 2026 Property Damage and Repair Sector report, chapter one, The El Niño stress test – climate, capacity, and the future of property repairs, is available for download online.

About Sedgwick

Sedgwick is the world’s leading risk and claims administration partner, helping clients thrive by navigating the unexpected. The company’s expertise, combined with the most advanced AI-enabled technology available, sets the standard for solutions in claims administration, loss adjusting, benefits administration and product recall. With over 33,000 colleagues and 10,000 clients across 80 countries, Sedgwick provides unmatched perspective, caring that counts, and solutions for the rapidly changing and complex risk landscape. Sedgwick’s majority shareholder is The Carlyle Group; Stone Point Capital LLC, Altas Partners, CDPQ, Onex and other management investors are minority shareholders. For more, see Sedgwick.