Evaluating flood risk in England and Wales in the approach to June 2013

Abstract

Sound banking principles and long-established practice require that commercial and residential properties subject to mortgage lending must be insurable. An estimated 5.2m such properties in England and Wales are subject to flood risks of various kinds. Since 1961, a series of agreements between government and the insurance industry has effectively secured availability of insurance for the vast majority of homes and small businesses. Under pressure from increasing losses and reduced flood-defence investment, the insurance industry looks set to restrict or withhold cover from a large number of higher-risk properties as the current agreement moves towards its expiry date in 12 months’ time. This paper looks at the background and principal reasons for property insurers’ caution, and at the potential effect on property values, and suggests the practical steps surveyors should consider to protect both their clients’ interests and their own practices.