My ideal home is in an area at risk of flooding – should I buy it?

Whether or not to proceed with the purchase of a property with potential flood risks is a difficult question often encountered by buyers.  Generally speaking, a property which is subject to a serious risk of flooding is likely to be on the bank of a river, meaning that the buyer has a decision to make between natural beauty and practicality.

More often than not the buyer will choose the peace and tranquillity offered by living next to a river, and will ignore (or at least partially disregard) the flood risk when making their decision.  In the past, this has often turned out to be a costly decision.

Following the flooding which occurred across the UK during 2012, and the realisation by many homeowners that their buildings insurance was insufficient to cover the severe damage caused to their properties and their belongings, a scheme was set up to enable homeowners to insure their property at reasonable rates, even if the property is at serious risk of flooding.

Most major insurers have signed up to the Flood Re scheme, which sees the insurer contribute a sum from each buildings insurance policy towards the scheme.  Flood Re then take on the responsibility of flood claims from the insurer.  It is estimated that insurers have contributed a total of £180m per year since the scheme’s inception in 2014, and this fund will be used to pay out to any homeowners affected by flooding.

The benefit to homeowners is that Flood Re allows insurers to reduce their premiums for properties with a known flood risk.  Flood Re have recently noted that many homeowners are not aware of Flood Re and are still paying high insurance premiums for properties with a history of flooding, but have pointed out that lower premiums are available if the homeowner does some research on the insurance market.  Given the advent of Flood Re, there is no excuse for any insurer to be charging lofty premiums for properties in flood risk areas.

Of course, whether or not you wish to buy a property in an area at risk of flooding is another matter – the upheaval of being hit by a flood must be rather unpleasant – but at least the insurance premium should no longer be a part of your decision.

If you are buying a property, please contact Andy Roscoe at Meaby&Co for advice: or call 020 7703 5034.

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