You may remember I talked recently about future problems obtaining insurance for properties in flood risk areas: insurance companies are threatening to withdraw all buildings and contents insurance policies for any properties in areas susceptible to flooding, which applies to a fairly large number of properties in the UK. So with flood water levels creeping upwards in the wake of the recent high rainfall across much of the UK, what is the latest news on the matter?
Insurance companies and government ministers have still not reached a mutually satisfying agreement and the arguments rumble on. As things stand, the insurance companies are planning on withdrawing insurance cover from July onwards unless the government agrees to pledge funds towards new flood defences in known risk areas.
Unfortunately, government funded flood defence plans are now under threat thanks to the purse tightening measures in place right now, so unless an agreement is hammered out between the two sides, landlords with properties in flood risk areas could have their insurance policies withdrawn or be forced to pay astronomical premiums to continue their cover.
Without insurance cover in place, many landlords may find that they are in breech of their mortgage conditions and unable to secure any new loans on the property. It will also be impossible to sell such properties since prospective buyers are likely to be non-existent. As a consequence, there is a great deal of concern amongst industry insiders that the issue could potentially destabilise the housing market in some areas, which would be highly undesirable for everyone.
