Towards better flood protection for homeowners

Towards better flood protection for homeowners

Teresa Cuesta Roca, Proprietor at St Albans based conveyancing solicitors Bryan and Mercer, considers the financial and human impacts of flooding and why they make a point of focusing on the risks as part of their conveyancing support.

We are so familiar with the scenes from this time last year on the Somerset Levels, where hundreds of homes were left counting the cost after devastating floods. It would be easy to assume that “it couldn’t happen here” – but it can and does. The most innocent stream can turn into a raging torrent after a single very intense downpour – and it is happening more and more frequently.

Home buyers have to take flood risk extremely seriously. Not only can it bring months, if not years of misery waiting for properties to dry out and replacing lost possessions, but the frustration and hassle of sorting out the insurance claim and knowing what is covered, becomes the real headache long after the waters have receded.

Flood risk can come in many forms – an overflowing river or drain may be obvious, but less so is groundwater flooding, which depends very much on the local soil conditions. Quite simply, water can rise through the floorboards without warning as underground aquifers can no longer handle the quantity of water. Also, older Victorian drains in the centre of our towns can often not deal with the sudden deluge of water from a cloudburst and can back up forcing dirty sewer water back into properties, causing all kinds of contamination.

It is clear that the insurability of the property is becoming a key factor in likely purchase completion, not least from the homebuyer’s perspective, but also that of the lender.

Lenders are taking an ever closer view on properties in high flood risk areas. Where insurance is proving difficult or expensive to obtain, lenders are understandably concerned about the security of their mortgage loan. Aside from the perceived blight and structural damage from flood water will take its toll on the value of the property and the ability to sell in the future.

Until now, there has been a gaping hole with insurance arrangements, with properties in flood prone areas exposed to either massively inflated premiums or excesses, or worst of all, excluded from any form of flood cover. The government has recognised the social costs of flooding and has invested huge sums in flood defences to protect vulnerable homes along rivers and by the sea. There are also some good flood support schemes that have been set up by local councils to try and ease the pain.

In fact, there’s a great example local to us here in St Albans. Villages like Marshalswick, Sandridge and Jersey Farm have all been blighted by flash flooding in recent years. Businesses and homeowners can apply to St Albans District Council for a “repair and renew” grant if their home or premises was flooded between December 1, 2013, and March 31 this year.

The scheme is intended to provide funds for additional flood resilience or resistance measures, such as drain protectors to stop sewer water backing up, but not for damage and items that should be claimed through insurance.

Businesses with premises affected by flooding may also be entitled to business rates relief, and those who can prove they were significantly hit by the floods, for example if they can prove loss of income as a result of road closures, may qualify for a business support grant.

Also, within the next few weeks the Government will launch its lifeboat for families stuck in flood prone homes. Flood Re is a state backed insurance scheme which will cover an estimated half a million flood prone homes. It will help owners whose insurance premiums are either impossibly high or which insurance firms have simply refused to cover.

It will be operated from a central fund that will be built up from a universal rise in premiums to pay out against high risk properties. However, there are many exclusions from the scheme, including properties built after 2009, leasehold, commercial and housing association properties, as well as the private rented sector/buy to let market. This excludes millions of properties.

However experts are doubtful that it will do much to assist the saleability of most vulnerable properties. The impact of flood risk on local property prices is hard to quantify but– inevitably – buyers should be understandably cautious about buying in an area with a high flood risk.

At Bryan and Mercer, we make it a matter of policy to advise our clients to get a detailed flood search as part of our conveyancing service. We feel it is a small price to pay compared not just to the cost of the property, but also the other financial and emotional risks you may face in the future.

Flooding is becoming a normal part of everyday life as our climate changes, so we accept a greater responsibility to help our clients through better, more comprehensive guidance.

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