Flood insurance for landlords row grows

AFS Team·23 January 2014·4 min read
Flood insurance for landlords row grows
It looks like landlords are going to be left high and dry under Government proposals to exclude them from a flood insurance plan.

Essentially, all households at risk of flood will be able to access flood insurance - but not if the properties are rented, leasehold or built since 2009.

It means that millions of homes will not be able get affordable insurance and a spokesman for the Council of Mortgage Lenders said they found it 'difficult' to understand why such a large swathe of residential property was being excluded.

The Government's scheme is called 'Flood Re' and offers a hybrid type of cover which would see insurers offering non-flood home insurance and the government picking up the bill for the flood cover, though this will be capped.

Flood-Re scheme slammed by landlords

The Residential Landlords Association (RLA) has slammed the scheme saying it discriminates against the private-rented sector.

Richard Jones, the RLA's policy director, said: “The flood insurance scheme will hit smaller landlords and some may consider their future as a result.

“This comes when private landlords are being urged to provide the necessary accommodation to help the nation's housing needs but this plan will also hit tenants who are flooded and then pose problems for local authorities who will need to rehouse residents have been flooded out of their homes.”

He added that there could be areas of property blight where landlords, and tenants, cannot get insurance cover for flooding.

The RLA has now joined forces with the Council of Mortgage of Lenders and the British Property Federation (BPF) to force the government to review its position.

Greater number of homes to be affected

They are particulate annoyed that the plan’s estimate of only 9,000 homes being affected is wide of the mark and they say more than nine million homes will now be excluded under the scheme.

A spokesman for the BPF said: “Floods do not discriminate between leasehold and freehold, renting or owner-occupied and there's little comfort in having insurance for contents cover if the building is left uninhabitable.”

He said that if a property is at risk from flooding then it should be able to be insured against disaster, regardless who lives in it.

The Association of Residential Managing Agents, which manages around half of the UK’s leasehold blocks, said they shared the concerns of their fellow organisations.

The Association’s chief executive, Michelle Banks, said: “Being unable to find affordable flood insurance for their properties means a large number of homeowners will be put at risk.

“This move could also affect a home’s saleability.”