Flood risk area residents could face repossession

Wed, 18 Jan 2012

People residing in areas of the UK deemed to be at risk of flooding may face the prospect of repossession.

This is Money reports that more than 200,000 homeowners living in such regions may lose their property because an agreement between the government and insurers is not going to be renewed.

As part of the deal, cover is provided by companies on the understanding that the Department for Environment, Food and Rural Affairs will keep up its expenditure on flood defences - but the Association of British Insurers, which was formed in 1985, has warned this 'statement of principles' will not be re-signed next year.

And with a new arrangement yet to be agreed, many dwellings could be left uninsurable, meaning those who cannot afford to fork out on costly premiums or excesses might face the prospect of repossession.

Pete Gettins, product manager at London and Country, stated: " Lenders can't and won't lend unless buildings insurance is in place, as not having it impacts on the saleability of the property."

He added it will also be in breach of the loan agreement for insurance not to have been taken out.

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