The Residential Landlords Association (RLA) has complained that Government plans to ensure that flood insurance is widely available will not extend to private rental property, leaving landlords and tenants in flood affected areas at risk.
Just days after much of the east coast of England faced some of the most serious flooding in over half a century the RLA is seeking urgent clarification from the Government over its flood insurance proposals currently going through Parliament.
The “Flood Re” scheme aims to ensure that flood insurance remains affordable and available to homeowners at high risk of flooding. The scheme, designed in conjunction with the Association of British Insurers, would provide a fund to offer those at high flood risk who might struggle to get affordable flood insurance with cover at a set price. Insurers would put into the fund those high flood risk homes they feel unable to insure themselves, with the premium to cover the flood risk part of the household cover capped.
Having been led to believe that landlords in the private rented sector would be covered, the Government’s response to the consultation on the scheme concludes that properties would be excluded where the owner does not reside in it. This would effectively exclude rented properties. This would mean landlords and tenants may not be able to obtain affordable insurance cover and would have to meet the full cost of any damage.
The Government document explains: “For properties to be eligible for Flood Re, they would need to be insured in the name of an individual, they would need to have been allocated a Council Tax band; be used for residential purposes; have an individual premium; and be occupied by the policyholder, or their immediate family.”
RLA policy director Richard Jones has now written to the environment secretary Owen Paterson MP seeking urgent clarification on the matter. In his letter he writes:
“This is an extremely disturbing development and poses significant threats to the ongoing viability of those areas where there is a significant risk of flooding. Insurance may not be obtainable at all or only obtainable on prohibitive terms. It could place landlords in breach of the terms of their mortgages.
“The Government is looking to support private rented housing but this will have the opposite effect.”
.jpg)
Comments
Does Flood RE cover social housing, or are they like private landlords deemed to be renting properties they do not live in and therefore will not be covered?
Does this mean that all landlords effectively will need to either pay more for their insurance with higher excesses?
How will mortgage lenders react?
Will Mortgage lenders and insurance companies look favorably at any landlord that makes provision to reduce flood risk and damage, whether a plan including temporary surface flood mitigation products like Floodlock Door Protection Strips e.g. if a listed building or if the user does not want unsightly products altering the look of the property or more permanent measures. There seems to be more questions than answers right now but perhaps it is time for landlords of all types to look carefully and flood mitigation products as the only thing that seems clear is that if we can reduce flood damage and cost by protecting assets then other costs will fall.