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Flood risk Housing could see Prices Plunge

Over 200,000 homes in the UK could become uninsurable, and subsequently unmortgageable, because of their susceptibility to flooding. An agreement, which is set to expire next June, has ensured that even homes in the highest risk flooding areas across the UK can obtain buildings and contents insurance, if the Government promises to spend more improving flood defences.

However this deal between the Association of British Insurers (ABI) and the Government is unlikely to be extended according to the director of Searchflow, Richard Hinton, because the Government has failed to uphold its part of the deal. Simon Douglas, director of AA Insurance, commented on the issue: “There are 200k UK homes at serious risk of flooding, and 2.4m homes at some risk of flooding from rivers or sea. The majority of homes have been able to get insurance from the agreement, but that ends on 30 June next year”.

All this means that those who are hoping to sell their homes in these areas will face having to slash prices in order to attract buyers, in the knowledge that new owners may not be able to get a mortgage on the properties. This is certainly an issue that will be hotly contested and discussed leading up to the end of the agreement between the Government and the ABI, and those affected will undoubtedly be asking why it is that the Government has failed to uphold their side of the deal.

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