A Flood of Issues

James Sherwood-Rogers is managing director at Landmark UK Property

Back in 2007 I was one of the founding members of the Know Your Flood Risk campaign which was established following the devastating and widespread floods that occurred that year. The ambition of the campaign has always been to raise the profile of flood risk and educate consumers as to how they can make their homes resilient or resistant from future floods. We now have over 250 members.

Alongside my other “professional hats” at Landmark and Quest, I continue to chair the Know Your Flood Risk campaign and was pleased to be actively involved in the annual “Know Your Flood Risk Week” which took place earlier this month.   

This year the aim of the week was to make consumers and the property industry aware of a fast approaching deadline, which could create ripples with homeowners, buyers and the industry itself and potentially in just over seven months’ time:

As from 30 June 2013 the “Statement of Principles” agreement between government and the Association of British Insurers is set to expire leaving a rather undefined future for flood insurance for UK homeowners. This agreement states that insurers will provide insurance for significantly “at risk” homes however once expired, such homeowners could face real issues in obtaining affordable flood insurance, if at all.

It is down to government to announce a solution to what will happen post-Statement of Principles and we await this news with baited breath.

In the meantime as it currently stands the expiry of the agreement has the potential to not only make obtaining affordable flood insurance for those considered to be significantly “at risk” extremely difficult but could also deliver a knock-on blow to house values or general saleability in the worse-affected areas. Must we then consider what happens with mortgage applications, should insurance become a barrier to those worse-affected?

It’s now only seven months away until the annual renewal date for many homeowners’ insurance policies, which could effectively overlap the expiry of the Statement of Principles in June 2013. We are therefore urging not only government to clarify its position on this matter as soon as possible, but also for the mortgage industry to contemplate what impact this could have on customers looking to purchase properties in affected areas in the near future, as consumers are likely to look to their trusted advisors for advice.