Flood risk buy to lets risk losing insurance cover | Georgia Landlord ...

Landlords face uncertainty over house prices and mortgage availability as home insurers and the government squabble over paying for flood protection.

Cover for millions of homes, including buy to lets, could be withdrawn as early as June if the government fails to meet the demands of insurers to reinstate flood protection cuts.

Home insurers pledged to offer insurance to at risk homes, providing the government invested money in flood protection ? but the agreement runs out on July 1, 2013 and millions has already been cut from budgets earmarked for improving sea walls and river banks.

Cover starting at the end of June could be withdrawn for homes in flood risk areas if no agreement is reached soon as they will be in force after the date the current agreement ends.

Simon Douglas, director of broker AA Insurance, said: ?Flood protection is a national priority, yet many people in flood-prone areas may find their homes difficult to insure from later this year.

?Some insurers are telling us that flood-prone homeowners might not be able to renew their cover later this year, because their new policy will extend beyond 1 July 2013: with all the implications for property value and mortgage availability that this implies.?

No insurance cover will blight property values, as they will be difficult to sell and in some cases, mortgage lenders may not offer funding.

Many landlords and other home owners could also breach mortgage conditions that require them to have buildings insurance in place for the life of the loan.

Richard Hinton, business development director at SearchFlow, a firm handling property searches for conveyancers, said: ?Buyers will be able to obtain flood insurance for the next few months, but the long-term prospects of properties at risk of flooding are potentially bleak.

?Buyers purchasing in high-risk flood areas face the possibility of very high premiums, significant reductions in value, less access to mortgage finance and even action taken by the mortgage lender due to breach of the mortgage agreements.?

Check if you have a property at risk by going to the Environment Agency flood pages [Opens in new window]

Source: http://www.georgialandlordinsurance.com/2012/02/flood-risk-buy-to-lets-risk-losing-insurance-cover/

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