With global warming increasing the possibility of Britain suffering from heavier rainfall and more ferocious tidal surges, insurers are becoming more cautious about extending cover to properties at increased risk of flooding.
Most mortgages require the availability of flood insurance, so if insurance is not available it is unlikely that a property will be mortgageable. This could have significant consequences for the housing market recovery.
Following an agreement between the Association of British Insurers and the government last year, from 2013 insurance companies do not have to provide automatic flood insurance cover for homes within a one in 75 risk of flooding. This could create uninsurable homes, as homeowners cannot find insurance or afford the premiums. It could also mean less development, as developers either struggle to find land without a flood risk, or have to pay for increased flood protection measures to reduce the risks to insurable levels.
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Yesterday at a British Property Federation (BPF) and City Property Association (CPA) breakfast seminar experts from the insurance and property industries considered these concerns as they looked at the real risk of flooding in London and the Thames Estuary over the next 100 years.
Dr Richard Dawson from Newcastle University, a leading academic expert on flood risk, introduced what he believes to be the 'real' risk of flooding in the Thames. And Rachael Hill, Leader of the Environment Agency's Thames Estuary 2100 (TE2100) project, set out the government's latest work in dealing with flood risk. The TE2100 Strategy, is the government's proposed strategy for mitigating flood risk in the Thames Estuary over the next 100 years.
Liz Peace, Chief Executive of the BPF, said: "As we saw in the summer of 2007, wide scale flooding can have significant implications for property owners. We all need to wake up to the increased risks of flooding. The government needs to act on its word to provide greater assurances over flood protection for developers to ensure that new homes and new regeneration sites are insurable and protected, and to ensure there is sufficient land released for development that is off flood plains.
"Most of the property at risk of flooding is already built, however, and property owners – commercial and households - need to be aware of the risks and to investigate the measures they can take to protect their properties."
(CD/JM)
