We live in a flood risk area and worry we won't get insurance against flooding next year, making our home impossible to sell. Is that the case?

By Rachel Rickard Straus

PUBLISHED: 01:49 EST, 11 February 2014 | UPDATED: 01:49 EST, 11 February 2014


We live in a flood risk part of Sussex in an old Rectory and are concerned that we may not be able to get insurance cover against flooding from next year, which may make our home impossible to sell.

Is that the case?

FN, By email.

Rachel Rickard Straus of This is Money says: Homeowners with properties at risk of flooding have been able to buy affordable home insurance since 2000, thanks to an agreement called the Flood Insurance Statement of Principles.

Risk: The reader lives in one of the parts of the country that is at risk of flooding

Risk: The reader lives in one of the parts of the country that is at risk of flooding

It is an agreement between insurers and the government that states insurance companies will continue to offer cover to homes and businesses at significant risk of flooding, on the condition that the government invests in flood protection measures that reduce the risk to those homes.

Had this not been in place, it would have been impossible for hundreds of thousands of homeowners to get insurance against flooding, effectively rendering their properties worthless should they wish to sell up.

 

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The problem is that the agreement is set to expire.

In its place, insurers and government have agreed to a not-for-profit scheme called Flood Re.

 
   

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But Flood Re has new limitations.

An alliance of property industry leaders and the Council of Mortgage Lenders warned last month that millions more homes than expected will be unable to access affordable flood insurance.

The proposals as they stand would exclude new build properties, all leasehold properties, buy-to-let properties, SMEs, housing association and council homes. Some of the most expensive properties could also be excluded - and it sounds like your home may fit into this category.

Victoria Davies, a solicitor at London law firm Harbottle & Lewis, says: Owners of some of the most expensive homes in the country may still struggle to get insurance against flooding, despite a new proposal agreed between the insurance industry and the government which is supposed to guarantee cover to those in areas at risk.

In fact, it will only guarantee flood cover against damage to homes in council tax bands A to G. The most valuable properties, those in council tax band H, are excluded from the agreement, which is planned to come into force next year.

This could make it hard for households in that band to get flood cover at all, or make it prohibitively expensive.

Regions across the country, such as Welney Marsh in Cambridgeshire (pictured), have been flooded in the recent extreme weather

Regions across the country, such as Welney Marsh in Cambridgeshire (pictured), have been flooded in the recent extreme weather

The new agreement, known as Flood Re, will be underpinned by a levy of £10.50 on every home policy in the country.

This will be used to subsidise insurance premiums to those in flood risk areas. The flood risk element of their premium will be capped according to their council tax band. For example, a household in lowest Band A will pay no more than £210 a year, rising to £540 for a home in band G.

 
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However, householders in band H not only risk having no insurance, because no insurer will be obliged to issue a policy, but may also face problems when they come to sell their properties.

Mortgage suppliers normally insist on insurance cover against flood, which might mean only being able to sell the property to cash buyers.

Another factor to be aware of is that homes can be pushed into a higher Council Tax band on their sale if any improvement works have been undertaken, which means flood-risk householders in band G need to be careful about any such works before a sale which may cause their banding to rise to Band H. Another excluded group will be homes built after January 2009.

The result of the changes could be a blight on large properties in vulnerable areas, and make areas with river or other water frontage less attractive for development.

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Given the grief and upheaval let alone the cost of being flooded I would imagine now that people will now look very seriously at buying any house that is liable to flooding. The flood risk info is now readily available,,so why would anyone now ignore it. Is the risk of flooding something covered in the property search??

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This is not helpful if renting in a high flood risk area. you never realised it would ever become a problem because 'safe as houses' come to mind that where you live would have drainage and preventatives inplace? so, the now situ being: can't get insurance, are' turned away' at a time most needing and are actually flooded out right now and no where else to go. damaged home, possessions, clothes, food,the garden, the tv,photos,just things,but special all the same . can't get to work, - no immediate transport. limited money, a few tinned beans salvaged..electric and gas, do you use it? can't put light on at nights, no power maybe? Also, you got school-aged children whose school AND home are flooded too,,, what help do they get pray tell? hardly any power you have, no control over this! But you the adult, the parent is supposed to know what to do-: The reason i post this is because i have been searching everywhere to help a couple dear to me who are presently in this exact situation.

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I live in an area at high risk of theft. Does anyone subsidise my home insurance premiums?? Er no!

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Very,very good point Phil. People need to grow a pair and take responsibility for their own decisions,

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this is because greedy councils built houses on known flood plaines and people who bought them are bearing the high costs with no chance of selling them. the innocent suffers yet again

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One on the radio today said it is okay to build on af lood palin as long the front door is up a few steps and 1 metre above the ground .I ask you?

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the price for your house will be cheaper now

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There are plenty of areas in the UK which are not flood planes - we choose to build on flood planes because of the proximity of employment opportunities and the location of business - the result is the North/South divide! Unfortunately, individuals and business are now experiencing the true cost of not addressing the problem which has existed for decades as the booming south has been the wealth creating centre of the UK. Well unless they invent something to control the ever increasing effect of climate change London and the Southeast will experience an ever increasing cost and corresponding reduction in wealth creation which will be detrimental to the whole of the UK - Not just from increasing business property/employment unit costs but also from the cost of flood defense schemes, increasing disruption, major failures in transport and infrastructure and increased cost of building houses that properly combat floods! We have choices but will we make the right decisions?

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Nice one Paul. You mean flood plain. Planes are aeroplanes.

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You can expect proprieties above Flood Level to rise significantly after this. Vote UKIP as Lib/Lab. Con Merchants don't care a DAM. Too busy sending OUR Money to AID other countries.

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The idiot savants of UKIP never miss a propoganda opportunity.

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Spend your money on making your home waterproof once, rather than spend on very expensive insurance EVERY year.

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Location ,location , location

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If you are next to the bank and would be flooded if it gave way you are in a flood plain

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Very handy for the ATM though!

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