Flood checks set to be standard for property purchases
16 February 2016 4387 Views
With the scale of devastation from flooding witnessed recently, anxiety about purchasing a property in a flood risk area is heightened. Maud Rousseau, Group marketing and communications director of SearchFlow, looks at the impact this environmental risk has had on the conveyancing industry and homebuyers.
Flood information on properties is included in environmental searches during the conveyancing process but SearchFlow can reveal that over the past six months, only one in five property transactions were carried out with flood reports. Many homeowners purchase a home unaware of the potential environmental threat that exists. As a reoccurring winter theme, it is patently clear the impact flooding has on businesses and homeowners. And, along with the Government, many sectors including insurance and conveyancing and environmental agencies have been scrutinised and criticised for their inactions towards protecting homeowners.
With the spotlight on this area of risk for homebuyers, our latest survey on conveyancers’ sentiment reveal that 75% of conveyancers now believe detailed checks on flood risks will become a default search prior to a purchase; only 11% believe it will not, with the remaining 14% unsure.
Since the devastating floods over the winter months this year, there has already been a 10% increase in flood reports ordered in just one month. This is set to increase further due to the changing sentiments across the conveyancing industry. It is reassuring to see that conveyancers are sitting up and listening, and many now believe that for added protection and reassurance detailed flood risk analysis should be carried out as standard.
Not surprisingly, homebuyers are also very wary of purchasing a property in a flood risk area. The latest What Mortgage poll revealed that 82% of homebuyers stated they would definitely be put off buying a property if they were told that it was in a flood risk area, 16% were unsure and only 2% said they would not be put off.
Homebuyers are very wise to be cautious. But for many, despite searches revealing there is a risk, it may not happen. Buyers could be withdrawing their offer unnecessarily on a perfect home. Homebuyers simply need to be informed of any risk so they can ensure they are properly protected; just in case.
The consequences of flooding are clearly devastating for homeowners and, for some homeowners, this has been compounded by insurance premiums skyrocketing with exceedingly high excess, or worse, homeowners unable to insure their property against the risk of flood.
To aid those in high risk flood areas, a joint industry and Government sponsored affordable flood insurance scheme, Flood Re, is expected to be implemented in April 2016. It will ensure flood cover is affordable for those households at highest risk of flooding. With a fixed premium geared to council tax bands, it will help limit the excess and ensure those at risk are properly protected with the right content and buildings insurance in place.
The conveyancing sector is in the best position ever to ensure homebuyers are properly protected and fully informed of potential risks prior to a purchase. Leading data search providers for the conveyancing industry are providing the most comprehensive and up-to-date data on flood risk areas, to help ensure conveyancers carry out their due diligence with confidence and reduce the chance that anything will be missed.
It is vital to ensure homebuyers are informed and therefore able to seek sufficient protection and it is reassuring that there is a general change of sentiment within the homebuying industry. But vigilance needs to become standard practice throughout the year, as the flooding subsides and we move into the spring and summer months, it is important that this level of caution is maintained.
Working to combat conveyancing fraud...
SearchFlow partners with Decision First...
SearchFlow unveils new brand identity...