The British Property Federation (BPF) has raised apprehensions over the lack of flexibility in the regulations for Flood Re, the affordable flood insurance scheme.
Flood Re is an arrangement between the insurance industry and the Government, to make sure that affordable cover is available for those in high flood risk spots. It is designed to ensure cover for all homeowners, however, millions of landlords and owners of leasehold flats will be unprotected against spiralling insurance premiums.
As well as leasehold properties in large blocks, homes in council tax band H and houses built after 2009, Flood Re will exclude private rental homes.
The BPF has been calling the Government to include leasehold properties within the scheme, stating that it is unfair to favour those who live in a house, over those who live in a flat. As there are almost five million leasehold properties in the UK, and a minimum of 800,000 of these in flood risk areas, this leaves many properties unprotected.
In their campaign, the BPF has required proof from the Government that leaseholders will not be affected by the exclusion. In their response to a Government consultation, the BPF greeted the Government’s pledge to monitor homes that are not included in the plan.
The regulations show no sign of a method that would allow amendments to Flood Re to include any new types of property at a later date. This has led the BPF to be concerned that the commitment to monitoring other types of property would not have any positive effects.
More issues with the regulations have caused other worries. Common hold properties are considered commercial property by their insurance policies, are included in the scheme. This has caused confusion over who is included, as leasehold properties have been excluded due to their policy being classed as commercial. The BPF have requested clarity from the Government as to why some commercial policies are covered by the scheme.
Furthermore, the regulations do not show any sign as to why the threshold for leasehold blocks included was for blocks of three units or less, consequently excluding any two-up, two-down conversions.
Director of Policy at BPF, Ian Fletcher, says: “There is a last change for Parliament to amend the legislation on Flood Re, so that leaseholders, small businesses, and other groups enjoy the safety net it provides.
“Having been campaigning for the inclusion of leasehold properties in Flood Re for a while, a repeated source of frustration has been the lack of explanation or evidence for many of the decisions made, and the regulations that have been set out so far do not do much to assuage these.
“The Government’s intention to monitor the impact on various excluded groups is welcome, but a suck-it-and-see attitude to affordable flood cover is not ideal for either householders, or people trying to run a small business.”1