Around 200,000 homes could become uninsurable in less than two years’ time, leaving some unsaleable and making valuations by estate agents and surveyors all but impossible.
Already, it is alleged, insurers are off-loading problem properties or hiking premiums to unaffordable levels.
However, the first that many home owners will be aware of the problem could be next June – just seven months away – when their insurance policies come up for renewal.
The warning has come from the ‘Know Your Flood Risk’ campaign, and results from an agreement between insurers and the Government to continue to provide flood insurance – but only up until June 30, 2013.
That is the date on which the ‘Statement of Principles’ between the Association of British Insurers and the Government is being withdrawn.
Insurers had pledged to continue to insure flood-prone homes on the basis that the Government would spend money on improving flood defences. But the insurance industry says this has not happened.
As things stand, the task of obtaining affordable flood insurance is set to become extremely difficult, if not impossible.
The ‘Know Your Flood Risk’ campaign is urging the property industry to develop a centralised flood-risk strategy that responds to the planned changes so home owners are fully aware of their obligations regarding flood insurance, and the industry is in agreement on how such properties are valued for mortgage purposes.
Approximately one in four homes in the UK is considered ‘at risk’ of flooding. Until now, obtaining flood insurance for ‘at risk’ homes has been relatively straightforward and, with the average insurance claim for a flooded home totalling £30,000, it has been imperative for many home owners.
James Sherwood-Rogers, chairman of the ‘Know Your Flood Risk’ campaign, said: “Whilst the impact that the ending of the Statement of Principles will have on flood insurance is unknown, early indications are not good.
“Some insurers are already trying to rid themselves of insuring previously flooded or ‘at risk’ homes long before June 2013.
“I have learned of several home owners who are struggling to find affordable insurance.
“The cost of their insurance has increased by two-thirds and the excess amounts are around £15,000 to £20,000. Such excesses are simply not affordable for the vast majority of people.
“It is vital, therefore, that surveyors and estate agents review the impact this policy change is likely to have, and create a centralised strategy that determines whether it impacts on the current valuation process.
“Thousands of homes in Hull or Cumbria, for example, are considered seriously ‘at risk’ – if insurance is difficult to obtain, what is the stance of mortgage lenders on lending on such properties?
“In turn, if mortgages could become difficult to obtain, what impact could this have on property values in these areas?”
A round table strategy session with key stakeholders from the property industry, including representatives from the Association of British Insurers, RICS, Council of Mortgage Lenders, Know Your Flood Risk campaign and environmental consultants, is being hosted by MP Tony Cunningham in Westminster today.
The session aims to address the priorities and key action points required by the industry in advance of the withdrawal of the Statement of Principles.
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Comments
@ Mr Burglar.
You are forgetting Carlisle and Cockermouth then.
Voice of Sanity: "Quality we have 19 posts of which 3 are on topic..."
Check your calculations, VoS - I count seven up to the point of yours, including two of my own, and one other where I requested one of the nuisance posters to actually comment upon the subject.
I would wholeheartedly agree with you, however, that completely off-subject postings are becoming the norm, and not only does this water down the importance of the subject but also results in busy folk like you having to blow away an awful lot of chaff to get to the wheat.
For MY part in that, I apologise. I would much rather have intelligent debate with any HPCer who cares to bring reasoned argument to the table than go handbags at two paces with the donnies of this world anyday...
VOS,
Good post and their lies the problem. How many insurers are going to even take a look at remedial works carried out by local authorities and calculate those into the risk?
None I reckon. I’m genuinely concerned about this, we supply flood information and drainage work to lazy solicitors all the time to get sales through but I fear rationalising with an insurer may be a step too far.
ps apologies for some typos
Quality we have 19 posts of which 3 are on topic - wonder why things never get done......
Anyhoo OT the problem is that the assesments are also too random and with scant regard to the topology of the area. Hence Hills are not excluded from flood plains.
Typical example is at the end of the road my office is in, at the bottom of the hill. The underground river had special measures done by CLG years ago and have not flooded since but it still remains 'at risk' The fact that a Major insurer has a massive underwriting office right at the lowest point makes me fell that they do not regard it as too high risk otherwise the reception would be on the third not the ground floor.
My point being we still have issue and also with that insurer. Lets face it people are (understandably after recent years events) risk adverse.
The truth is if you bought on a flood plain you will have to pay very high premiums to compensate the high risk, just like younger drivers, oe estate agents on business insurance.
The insurance companies should not penalise however when information is provided to show that they are basing the descision on incorrect information.
PeeBee - don't stoop to the idiots level.
WavyDavy:
I've been called worse...
It may have slipped your attention that the subject of this thread is the blighting of homes by insurers - NOT posting NameyWameys that might make me spit out my dummy like your significant other, donnie.
You also have nothing to offer on the real subject, I take it?
Ahhh well, hope you and donnie have a long and happy future together in your little world of blissful ignorance ;o)
PeeBee sounds like such a bell end.
AceofSpades: Oh, dear - I failed then.
The LAST thing I wanted was to leave 'donnie' with his danglies on display.
After all - he made enough of a laughing stock of himself without THAT embarrassment befalling him... ;o)
You've not even "played rough" PeeBee - he/she had a pop, had their pants pulled down and now decides to throw a strop. A common event on this site these days!
donnie: You obviously cannot debate like an adult (or my four year old grandson, for that matter...) - that's fine. Maybe, then, a discussion website is NOT really the place for you to hang around?
When you eventually do grow up and decide to bring something to the party, instead of crying in the corner because all the others play too rough for you, I look forward to seeing what you have to say for yourself.
Okay?
As I've got appointments later I thought I would post my final post.It should be slotted it after whatever demeaning post pee bee writes;
"You just can't stop/help yourself can you.
You have to have the last word,which from your general tone is always right of course."
Point well and truly proved.
This is a serious matter which perhaps the NAEA could investigate for us, if they are not already doing so.
The environment agency presently have my office about 6ft underwater, wonder if I can get a rent reduction come June 2013? I already have tax deductible wellies of course.
I lie, but I did disconnect the low air intakes on my last 2 Peugeot 406's due to floods, its about the only bad design item on those cars if you work on the Somerset Levels.
donnie: so - you have an opinion, as is your legal right. Good for you. Pity that the opinion is regarding me and my views and not the story, however.
Still - rather than shout you down, as you would like all to believe is my only aim on here, I would like simply to clarify a few matters and ask for some responses. It's called debate. Come on, try it - you might just enjoy it...
Having re-read my post, I believe that the only 'view' I expressed was that the poster I referred to had added nothing to the discussion but had simply plugged his company services.
Perhaps you would like to enlighten the readers what, in YOUR opinion, I stated that was so wrong in your eyes, and what your opinion on the subject matter actually IS?
You seem to have stopped short of that.
Lastly, posts do not have to make people laugh. I never said they did. But when that is the apparent aim, then it should be executed well, and I cite Jonnies contributions as the standard to aim to. The previous poster made the throwaway comment "Alternatively, IHS, you could advise your clients to move to the top of the hill." In my opinion (see - we are all entitled to one - AND to express it...) that was an attempt at humour which fell flat.
I look forward with great interest to your next post.
Surface water flooding, Mr Pali. I hope Nick understands that before he directs lots of people to buy at the top of the hill, if they don't buy 'his' report.
At least if the price falls the HPC silly people will at last be happy, then they will have to find something else to cut and paste crap about to tell mummy we have been clever today.
Can posters please remember that Pee bee likes to think that only his views matter on these forums so please don't post unless you want to be shouted down......and since when have posts got to make anyone laugh?.....really.
'nick @ Pali Ltd': - okay so you got a plug or two in. Congratulations. Other than that, you offer NO weight whatsoever to the discussion. The properties referred to will be blighted LONG BEFORE your cut-price buyer's report tells them what the owner and Agent already know.
How do you suggest that this report, when bought by a vendor, may "help to prove" that a particular property within a flood zone area is not at risk? Will an insurer reverse a decision? Will a buyer trust the report? And, if so, what if it DOES then flood? Who will accept responsibility and indemnify the buyer?
Nearly as good as the 'move to the top of the hill' throwaway remark... That will get laughs from approximately NO-ONE.
Everybody
Bring your businesses and families North
It is hilly, and you will not get flooded
Wages are cheaper - houses are cheaper and the air is cleaner
You will also be able to get insurance
Burglar
The thing to do if you are a buyer is to buy a flood report before you buy. We have a half price sale during flood risk week. This also applies if you are a seller or are having trouble obtaining insurance or a mortgage. The report may be able to help you prove that your property is not at risk. Alternatively, IHS, you could advise your clients to move to the top of the hill. But of course they may not be able to sell. It is a real problem as we concrete over the country.
Nick, Property And Land Information.
This issue has been geting steadily worse over the last few years. Most conveyancers are now taking the issue seriously and I hope that the Law Society will provide some official guidance soon.
My parents had that, they were within about a quarter mile of a river that floods annualy and so they were told that they were a flood risk. The fact that the rest of the village, and probably a fair amount of the country, would need to be flooded before the water reached the bottom of the road was beside the point....
It is also very hit & miss as Insurers use post codes and I have clients who have been told that they are in a flood risk area when they live half way up a hill!