An unprecedented El Niño
“We should be clear that this is an unprecedented event. I have never seen an El Niño signal this intense in our forecasts….. if the forecast is accurate – and other forecast systems show similar extreme values – then 2026 will far exceed our recent experience of El Niño and its worldwide climate influences.”
– Professor Adam Scaife, Head of Long Range Forecasting at the Met Office, published 21 August 2026
Currently, the Niño 3.4 index is forecast to peak at around 3.6°C above average – approximately 0.8°C above the 2015-16 record. In 150 years of data, the gap between the strongest and fifth strongest El Niño is only about 0.5°C, placing this forecast beyond any previously observed event. (The Met Office)
The World Meteorological Organization (WMO) said its forecasts
'show a nearly 100% likelihood that El Niño will continue through February 2027.'
1.2 Potential effects on the UK
The potential effects of this ‘Godzilla’ El Niño on the UK aren’t certain. However, the Met Office indicates a higher likelihood of wetter, windier, and milder-than-average conditions through autumn and into early winter.
Property damage claim trends from previous strong El Niño years suggest that it will present a stress test that reveals how exposed the property repair sector is.
Over the past decade, UK property has become more expensive to insure, harder to repair and more heavily regulated. Flood, storm, escape of water, subsidence, statutory duties, underinsurance, supply-chain disruption and contractor capacity are no longer separate pressures – they are converging into one fragile recovery system, across the market.
1.3 Fault lines – exposed
The following pressure points explain why a concentrated weather surge could become a repair-capacity, insurance and balance-sheet problem rather than a short-term claims spike.
Claims
Claims volumes are generally increasing. A major weather event will inevitably expose weak points in a property repairs system that has been sized around business-as-usual claims for:
Escape of water
highest-frequency peril in the UK
c.£1.8m
insurers’ daily spend on escape of water claims (ABI)
£8,600
average claim cost (Aviva)
Flood
high rainfall events, over 50 mm in a 24-hour period, have increased in the last decade (Met Office)
6.3m
English properties currently at risk, forecast to rise to 8m by mid-century (The Environment Agency)
subsidence
4 of the last 6 years
were subsidence surge years – 2026 is record-breaking. Heavy rainfall on dry, sun-baked ground can cause runoff and increase surface water flooding and flash floods
Capacity
construction firms folded in the last ten years (The Insolvency Service)
in 2025 alone – 20% up on 2019 (The Insolvency Service)
SME repair contractors affected by skilled tradespeople shortages (FMB / CIOB)
more construction workers needed by 2030 (CITB)
Concentration makes it worse – property repair work sits with SME contractors, the firms least able to absorb wage inflation and most likely to be swamped when a surge event hits a whole region at once.
Repair costs
Sedgwick’s Repair Solutions Building Cost Review, Q2 2026, reports:
year-to-date rise in contractor costs – base case 2026 forecast 4.18%
estimated base case cost inflation for 2027 – potentially 14% if geopolitical instability escalates
Cost inflation – in both materials and labour – shows no sign of slowing down in the immediate future.
New regulatory requirements
Building Safety Act –
duties now run alongside September 2026 requirements (MHCLG)
Awaab's Law Phase Two –
from 30 November 2026 (MHCLG)
Minimum Energy Efficiency Standards (MEES) –
tightening to EPC B by 2031 (DESNZ)
Each brings its own evidence burden, capital programme and deadline.
The balance sheet
of commercial properties surveyed in 2026 were underinsured (Sedgwick).
between declared buildings sums insured and assessed rebuild costs – comprising £15.61bn of underinsurance and £4.51bn of overinsurance. £2.36bn higher than comparable 2025 data.(RebuildCostASSESSMENT.com)
A persistently wet and stormy winter will turn a seasonal claims spike into a full property repair market stress test. Organisations that check their response plans, repair networks and rebuild valuations now will recover fastest”
Keith Walters Director, Sedgwick Repair Solutions
