ISSUE 7/05

Flooding homes - caveat emptor!

By Sara Mills

Sara Mills

Did you know that if you buy a home that is susceptible to regular flooding, it could be devalued by as much as 25% compared to a property which has no flood risk? In the worst cases, this can render a property unsaleable as it becomes impossible to insure. Even if cover can be secured, properties that are deemed to be "flood risks" often attract insurance premiums up to 300% higher than those properties which are not at risk.

The main problem for homebuyers is that all mortgage lenders insist on borrowers having full buildings insurance in place before they will grant a mortgage. If your home is blacklisted following a discovery of risk after the loan has been taken, you may find that you are still covered under the lender's insurance. However, if your mortgage lender discovers at any time that you are not adequately insured, it is possible that you could be requested to repay the balance of your mortgage!

Areas are designated "flood plains" if they are affected by flooding when a river rises above its bank or in coastal districts where there is a history of high tides and stormy seas.

In the last three years flooding has become a greater matter for concern. The more extreme climatical conditions encountered in recent years have forced home owners in the UK to better prepare themselves for the damaging effects of extreme and severe weather. As approximately 1.85 million homes (and 5 million people) are affected, it is clear that there is a distinct need for more protection against floods.

After the last bout of serious flooding in Britain, the government reached an agreement with the Insurers that insurance cover would be provided on the majority of homes notwithstanding that were located on flood plains. This agreement was to apply for a period of two years from 1st January 2001 and at that time, around 5 million people were affected. This agreement has now expired and the ABI (Association of British Insurers) has since implied that it is unlikely to be renewed.

But your home isn't at risk merely because it is standing in a flood plain. Last year, over 6,500 homes were swamped when rivers burst their banks as a result of rising water levels, burst water drains and hillside run off caused by unexpected rain.

So how do you find out whether your home is at risk?

Details about flooding are available to homebuyers both from their Local Authorities and also from the Environment Agency. The government has set up an informative website at www.environment-agency.gov.uk. This website includes a very effective "postcode search option" which enables one to discover whether the area surrounding any property is prone to flooding. A "flood map" can be generated which shows clearly the areas that are affected. Local contact details are shown and there is the opportunity to download fact sheets. There is also a telephone advice line on 0845 988 1188.

The Environment Agency also offers simple and effective advice on ways to protect your home from flooding.

So, if you do suspect that your current or future property may be affected then it is well worth taking the time to equip yourself with all the facts.

At least then you will know where you stand... before you sink!