16:16 PM, 23rd January 2012, About 10 years ago 1
Thousands of buy to let properties all over the country are at risk of becoming uninsurable and unmortgageable in a few months.
Homes and business properties worth around £214 billion could be affected from June if the government fails to reach a new agreement with home insurance firms over flooding.
The warning comes from Searchflow, a property research firm that deals with searches for conveyancers.
The problem stems from a government agreement with insurers to carry out fund flood improvement works to protect property in at risk areas.
The agreement runs out in June 2013, but spending cuts have seen much of the proposed flood safety works scrapped or delayed.
Insurers are unhappy at the increased risk and are warning cover may be withdrawn in many areas.
If they carry out their threat, buy to let and home insurance renewals from June 2012 could cost more or be rejected as these new policies will be in force a year later when the agreement expires.
The effect is leaving homes without insurance cover, which could breach mortgage contracts and reduce the value of properties.
Some properties facing a high risk of flooding have had quotes for insurance cover with an excess of up to £20,000 a year.
Richard Hinton, business development director at SearchFlow, said: “Buyers will be able to obtain flood insurance for the next few months, the long-term prospects of properties at risk of flooding are potentially bleak.
“Buyers purchasing in high-risk flood areas face the possibility of very high premiums, significant reductions in value, less access to mortgage finance – even action taken by the mortgage lender due to breach of the mortgage agreement – is high.”
To find out if you have property in a high risk area, go to the Environment Agency flood pages and enter the post code
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