Searches to identify the risk of flooding for the residential and commercial property market are set to become standard, according to a leading conveyancing search provider.
With the scale of devastation from flooding witnessed recently a recent survey reveals that 75% of conveyancers now believe detailed checks on flood risks will become a default search prior to purchase.
Flood information on properties is included in environmental searches during the conveyancing process, over the past six months, only one in five property transactions were carried out with flood reports. However, since the devastating floods over the Christmas period there has already been a 10% increase in flood reports ordered in just one month, which is set to increase further due to the changing sentiments across the conveyancing industry.
A leading conveyancing expert said “It has been patently clear the impact flooding has had on businesses and homeowners. Along with the government, many industries from insurance and conveyancing to environmental agencies have been scrutinised and criticised for their actions towards protecting homeowners and businesses. It is reassuring to see that conveyancers are sitting up and listening, and many now believe that for added protection and reassurance detailed flood risk analysis should be carried out as a standard service.”
Not surprisingly, homebuyers are also very wary of purchasing a property in a flood risk area. A survey by What Mortgage found that 83% of homebuyers stated they would definitely be put off buying a property if they were told that it was in a flood risk area, 16% were unsure and only 2% said they would not be put off.
The consequences of flooding are clearly devastating for homeowners and, for many, this has been compounded by insurance premiums skyrocketing with exceedingly high excess, or worse, homeowners unable to insure their property against the risk of flood.
To aid those in high risk flood areas, a joint industry and government sponsored affordable flood insurance scheme called Flood Re is due to be implemented in April 2016. It aims to make flood cover affordable for those households at highest risk of flooding. With a fixed premium geared to council tax bands, it will help limit the excess and ensure those at risk are protected with content and buildings insurance.
“Anxiety about purchasing a property in a flood risk area is heightened at the moment. Homebuyers are very wise to be cautious. But for many, despite searches revealing there is a risk, it may not happen. Homebuyers simply need to be informed of any risk so they can ensure they are properly protected; just in case.
“The conveyancing sector is in the best position ever to ensure homebuyers are properly protected and fully informed of potential risks prior to a purchase. Leading data search providers for the conveyancing industry are providing the most comprehensive and up-to-date data on flood risk areas, to help ensure conveyancers carry out their due diligence with confidence and reduce the chance that anything will be missed. And, as the flooding subsides and we move into the spring and summer months, it is important that the potential threat remains at the forefront of everyone’s minds.”
Insurance claims to cover the damage caused by the devastating floods this winter are likely to cost around £1.3 billion, the Association of British Insurers estimates.
The average claim expected to be in the region of £50,000, compared to an average £31,000 for the 2013/14 winter storms.
Nearly 15,000 claims for property damaged by the flooding have been made, with more than 5,000 coming from business customers. Thousands of smaller claims are also being dealt with for storm damage and a total of 5,600 motor claims have been received.
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