Industry wants an end to flood uncertainty


There is uncertainty between the British Government and the insurance companies concerning fairness when it comes to Flood Re proposals. The British Property Federation has raised concerns in respect to this as it is likely to affect the property market negatively. The federation insists that there should be no discrimination by the government as this is likely to put many people off from buying properties in areas prone or are suspected to be hit by floods. This implies that many houses for sale in Islington, even if they are not in risk of flood, will be listed among other areas that are flood unsafe for the buyers. All these can be achieved if the Government and the Insurance companies come up with proposals which accommodate all properties irrespective whether they are leasehold flats or houses.

Flood Re refers to a scheme where premiums paid annually to insurance companies are capped and the payouts for the damage resulting from the floods comes from a central pool of money. The main reason of this was to add stability in the property market and also cushion home owners.

The British Government is currently engaged in efforts to remove leasehold and privately rented properties from the scheme as they are perceived to be commercial. British Property Federation is very worried about this as it is likely to affect the property market negatively and discourage many who are interested in the property industry as buyers or sellers.

The Federation is concerned on how the government can choose on some areas in the property market that they want to protect and help while leaving others out. Estate agents London are likely to be pushed away from this industry especially those properties in areas recently hit by floods. The buyers are most likely to investigate the level of premiums they will pay before buying properties in these areas unlike if the play ground was leveled. This therefore means that homes around flooded areas or areas which have recently hit by floods will be hard to sell as many buyers will be afraid, a concern raised by the property Federation.

The information obtained from Leasehold Knowledge Partnership clearly shows that at least a total of 800,000 properties are on lease in flood risk areas of England. Out of the 800,000 leasehold properties a total of 70,000 properties are earmarked as at high risk of being affected by these floods. This leaves property owners and players in the market confused on the way forward if the British government excludes them from the Flood Re cover.

It must be understood that floods do not discriminate as well as the insurance industries or companies. With this understanding, the Government must not also discriminate leasehold properties which may be flats for that matter. There are no justifiable reasons forwarded by the government in order to discriminate leaseholds as this will hamper the property industry adversely and it will be quite unfair. Flats must be considered as other houses and must be given equal and fair treatment. British property Federation policy director, Ian Fletcher insisted that this exclusion will be unfair to a total of four million PRS properties in British. This must persuade the Government to consider their position in relation to leasehold properties.