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Hometrack Launch Climate Change Risk Management Product for Lenders

A brand new Climate Change Risk product has been launched by Hometrack, a provider of insight and intelligence to the mortgage market, to help lenders increase their understanding of the impact of climate change on property valuation and meet increasing regulation from the Bank of England.

Lenders will gain greater control of climate change risk in their mortgage portfolio with the product’s unique ability to identify current climate change risk, as well as its ability to assess how that risk is projected to develop over time. It also allows lenders to be laser-focused in actively managing their climate change risk aligned to their risk appetite, distinguishing areas of concentration risk, and incorporating key climate change metrics into their mortgage origination strategies in real-time.

Streamlining climate change risk assessments for lenders, the product brings together critical risk components into a single lender-focused tool. It is delivered seamlessly through each lender’s existing and integrated platforms, at origination and through back book portfolio assessment, enabling quick and easy risk identification and decision management for lenders.

Hometrack’s Climate Change Risk proposition enables lenders to model for both present and future risk, and consolidates the following expert insights using a top UK valuation model (AVM) and dataset of property valuations:

  • Flood Risk: Lenders will benefit from Hometrack’s partnership with Ambiental, the UK flood specialist, who will provide river flow, rainfall, storm surge and climate change predictions. The model includes testing for ten flood scenarios, facilitating faster risk assessment of each lender’s physical assets.
  • Ground Risk: Hometrack’s partnership with Terrafirma, a UK provider of ground risk analysis, will afford lenders a forensic assessment of the climate related risk associated with property including ground movement, mining, erosion and landslides.
  • Energy: Unlocking easy access to critical data such as EPC ratings and an assessment of a property’s energy efficiency data, lenders will benefit from a present day view of the possible transitional and affordability risks to a property.
  • Valuation: Modelling the impact of ongoing climate change on property values, the product translates geo-physical climate risk into easily understandable direct risk to property for lenders. The product is also fuelled by Hometrack data from over 50 million valuations per year, delivering unique benchmarking insights for customers. This can be overlaid with other important property risk data to support lenders with more advanced risk mitigation where several risks are examined together, instantly, at the point of mortgage application.

Offering lenders the speed and cost-efficiency of a pre-packaged data service, supported by risk analysis tailored to meet their unique needs, the product is backed by the market leading expertise of Hometrack’s dedicated Data Science team. Hometrack’s Climate Change offering can deliver an assessment of risk on a lender’s existing mortgage portfolio including market benchmarking to provide analysis on market trends in this space and a comparison to the rest of the market.

Lenders can also access climate change data at the point of mortgage origination, making it easy to consume as part of the broader mortgage risk assessment. Both capabilities can be provided as a one off or updated at the preferred frequency of the lender.

Theo Brewer, Director of Analytics and Consulting, Hometrack, comments: “We need to drive climate change up the agenda for the mortgage industry and effect change from within. For Hometrack and our customers, this really means accurately identifying where, when, how often and how severe climate change related risks are going to develop, as well as devising the appropriate strategies to continue lending whilst understanding and mitigating risks.

“Our solution is designed to provide lenders with a forensic view of climate change risk, combining scientific expertise across the flood, ground and property value modelling spaces with the ability to seamlessly integrate data and decisioning capability into their mortgage and credit risk platform.

“We have enlisted the best possible partners in Ambiental and Terrafirma to deliver a collaborative solution and ensure our customers benefit from the highest quality, most accurate and most current risk data that draws upon years of experience in modelling and understanding climate change challenges.

“Our solution extends beyond identification of where physical and transitional risks are located now and in the future, to understanding how property value, desirability and saleability may also be impacted. The addition of climate change events data and the ongoing study of how properties have responded to historic events puts Hometrack in a unique position to accurately solve for the next key question for lenders: what is the expected impact to property values?”


  • Francis is a journalist and our lead LatAm correspondent, with a BA in Classical Civilization, he has a specialist interest in North and South America.

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