London Faces Up to £45 Billion Bill to Protect Homes From Extreme Heat, Mayor Warns

London has set out, for the first time, a comprehensive plan for dealing with extreme heat in the age of climate change — and the price tag is substantial. Mayor Sadiq Khan's 'Heat Ready London' report, published on June 25, 2026, warns that making the city's most vulnerable homes resilient to rising temperatures could cost between £9 billion and £45 billion. The report details the threats Londoners face from poorly adapted homes, transport systems, offices, and public spaces.

The report's release coincided with a record-breaking June heatwave that prompted the Met Office to issue a rare red alert for extreme heat in the capital, with temperatures forecast to reach close to 40°C — only the second red Heat-Health Alert since the system was introduced in 2003. London experienced an all-time May temperature record of 35.1°C earlier in 2026. According to the mayor's office, around 1 million London homes are at high risk of overheating.

The financial dimension is striking. The 2022 heatwaves — when London first experienced 40°C temperatures — cost an estimated £1.5 billion ($2 billion), according to the mayor's office. Mayor Khan framed the issue as simultaneously 'an environmental crisis, but also an economic crisis, a public health crisis, and a social justice crisis,' adding that the costs of inaction outweigh the costs of action. Critically, the report acknowledges that City Hall cannot fund the necessary upgrades alone and will need to turn to private investors to help pay for resilience measures.

Priorities outlined in the plan include adding external shutters and shading to high-risk homes, planting more trees, expanding access to swimming, and lowering temperatures in schools. The report concedes that air conditioning will be needed for vulnerable settings such as health and care facilities. London also recorded its highest number of wildfires since 2022, with around 88 wildfire incidents during the summer months of 2025 — double the number seen in 2023. For the insurance industry, the report underscores the growing materiality of physical climate risk in property underwriting, the potential for new heat-related coverage products, and the role of insurers and institutional investors in financing large-scale climate adaptation.