'Discrimination' against social homes under new flooding proposals
Millions of homes across England and Wales, including all PRS homes and social homes, could be left without access to affordable flood insurance under a new scheme.
Flood Re is a government-backed flood insurance pooling scheme for high-risk properties which is scheduled to come into force in summer 2015.
But an alliance of property industry leaders including the British Property Federation and the Council of Mortgage Lenders yesterday warned that exclusions will leave many millions of homes without any access to affordable flood insurance. The BPF and CML are calling for an amendment to the Water Bill, which will be given a second reading in the House of Lords on 27 January.
This comes on the same day an independent committee said 250,000 homes are expected to face significant flooding by 2035 because of a shortfall in funding.
Richard Jones, policy director of Residential Landlords Association, says this ‘discrimination’ will hit local authorities, tenants and landlords alike.
He said: ‘We are very concerned about this discrimination against the private-rented sector… This comes at a time when private landlords are increasingly called on to provide the accommodation necessary to the nation’s housing needs. This will also hit very badly any tenants who are flooded and would pose problems for local authorities who might have to rehouse some residents affected by flooding and who could be faced with areas of property blight because landlords cannot obtain insurance cover.’
As currently defined, Flood Re will exclude most buildings cover for:
- Leasehold properties;
- The entire private rented sector;
- Housing association homes;
- New-build homes constructed after January 2009;
- Council homes; and
- Properties in council tax band H.
Flood Re is intended to replace the ‘Statement of Principles’, under which insurers offered affordable flood coverage to the vast majority of households, in return for government maintaining its spending on flood defences.
Ian Fletcher, director of policy at the BPF, said: ‘Every property that is occupied is somebody’s home. Flood doesn’t discriminate between freehold and leasehold, owner-occupation and renting, and it will be small comfort for tenants who have contents cover if their home itself is left uninhabitable. If a property is at risk, regardless of its status, it needs to be able to insure itself affordably against disaster, not least because that is a condition of most mortgages.’
He continued: ‘Also at a time when government is taking so many positive steps to encourage investment in the private rented sector and promote responsibility in the sector, it seems extremely contradictory to exclude these properties from possible essential flood cover.’
The alliance estimates that millions of properties will be affected rather than the widely predicted 9,000 homes.
Speaking ahead of the second reading of the Water Bill in the House of Lords on 27 January, the BPF and the CML are urging the government to reconsider its plans, which will negatively impact a huge proportion of households and the industry.