Government's plans to build homes in 'Europe's Silicon Valley' at risk of subsidence before work even begins

Thousands of new homes planned for construction in the Oxford-Cambridge growth corridor could face serious subsidence risks, potentially leaving future homeowners with uninsurable properties, experts have warned.

The Government’s plan to build 4,500 homes in the region, part of a wider drive to tackle the housing crisis, is now under scrutiny as geological concerns come to light.

Analysis of British Geological Survey data suggests that areas within the corridor are highly susceptible to ground movement due to the presence of gault clay, a soil type notorious for its expansion and contraction in response to seasonal weather changes.

What is the Oxford-Cambridge growth corridor?

The Oxford-Cambridge Growth Corridor is a Government-backed initiative aimed at boosting economic growth between the university cities of Oxford and Cambridge.

The plan focuses on improving infrastructure, including new housing developments, transport links like the East-West Rail, and business hubs to support science, technology, and AI industries.

The goal, according to the government, is to transform the area into "Europe's Silicon Valley", leveraging the world-class research and innovation from both universities.

Climate change driving increased subsidence risk

However, these plans are at risk, experts warn, as longer dry spells in summer followed by heavy rainfall in winter are exacerbating soil instability, leading to unsound foundations in homes.

Adding to these concerns, new analysis by home insurer Aviva reveals that one in thirteen (8%) new homes built in England in the last ten years are in a flood zone, the equivalent of almost 110,000 homes. The insurer also found:

• Three in five (59%) new build residents think their home is at risk from flooding.
• Half (50%) of new build residents believe climate change will impact their home in the next year, rising to 71% in the next ten years.
• A fifth (19%) are concerned the location of their home is unsuitable due to potential flooding.
• Only a quarter (26%) of new build residents have no concerns about the quality of the build.

Freya Chapman, from ground engineering firm Mainmark, highlights the issue, noting that some loss adjusters already refuse to cover certain postcodes due to subsidence risks. "The ongoing wet weather we’ve experienced following last year's record heat will have had a profound effect on ground saturation and the frequency of floods. The resulting washout and foundation movement is expected to cause cases of subsidence to peak, with central regions such as Bedfordshire and Oxfordshire, which saw record rainfall in 2024, at a more significant risk."

She added: “We can expect to see a peak in subsidence cases in coming months, and due to the lengthy process, from surveying to payout, which can take upwards of six months, we most likely won't see these claims come to fruition until late 2025 or early 2026."

The growing cost of subsidence

Subsidence-related home insurance claims have surged in recent years, with the Association of British Insurers (ABI) reporting a 61% increase in payouts in the third quarter of 2024 compared to the same period in 2023.

Some homeowners with existing subsidence claims have seen their insurance premiums rise by as much as 40% year on year.

The wider insurance industry is also facing pressure to address the rising costs. Louise Clark, a policy adviser at the ABI, acknowledges the strain on household budgets and calls for greater government action.

“More investment in flood defences and surface water management is crucial,” she says. “Equally, we must stop building on land highly vulnerable to subsidence and other environmental risks.”

Will the Government rethink its housing strategy?

The Oxford-Cambridge growth corridor has been identified as a key driver of economic expansion, with potential benefits estimated at £78 billion over the next decade. However, the subsidence concerns highlight the need for a more cautious approach to large-scale development.

A spokesperson from HM Treasury stated that infrastructure concerns are under review but emphasised that the UK’s home insurance market remains competitive and regulated by the Financial Conduct Authority (FCA). Yet, as subsidence risks increase, the cost and availability of insurance could become a major barrier for future homeowners.

With the Government’s housebuilding strategy aiming to deliver 1.5 million new homes in the next five years, industry experts are calling for stricter planning regulations, enhanced ground building surveys and greater awareness of the risks associated with building on unstable land.

As subsidence claims rise, ensuring new developments are resilient to climate change and soil movement is becoming an urgent priority for builders, buyers and policymakers alike.