Rise in flood risk could make one million homes uninsurable

Firms warn of effect of government spending cuts on planned defences

A A A

Homeowners living near rivers and the coast face losing up to 40 per cent of the value of their homes as flood risk makes them uninsurable.

More than a million homes and 300,000 businesses are at risk, including those in parts of London, Southend, Brighton, Reading, Birmingham, Nottingham, Liverpool, Manchester, Hull, Middlesbrough, Blackpool, Glasgow and Edinburgh, the Environment Agency says.

The insurance industry points to evidence that climate change and rising sea levels will increase the likelihood of floods. It has an agreement with the Government – which runs out in 2013 – committing it to provide cover for customers, as long as flood risk is properly managed.

Insurers are expressing concern about cuts to investment in flood defences implied in the coalition's Comprehensive Spending Review, and the affect of funding cuts on extending the agreement – the UK is currently one of the few countries to provide flood coverage automatically through property insurance.

Nick Starling, of the Association of British Insurers, said: "We must ensure that our spending on flood defences and flood management is targeted to those areas where it is needed the most, and that the Government implements a long-term flood management strategy."

Flooding is expensive for insurers, with claims typically between £20,000 and £40,000. In the past decade insurers have paid out £4.5bn to customers whose homes or businesses have flooded, three times the £1.5bn paid in the previous decade.

Under the spending review, the Department for Environment, Food and Rural Affairs took a 29 per cent budget cut, including £110m from planned spending on new flood defences. Defra insists flood risk management is a "priority".

Some 20,000 families in Essex coastal areas say they have lost equity and are struggling with increasing premiums. Essex County Council has approached the Government for £20m to build a sea wall to protect 35 high-flood-risk homes at Great Wavering. The Environment Agency has completed 160 flood schemes defending 160,000 properties since 2007.

Dr Paul Leinster, its chief executive said: "We will continue to reduce flood risk by investing in defence schemes, but it is essential that people are all also better prepared, by signing up to the Environment Agency's flood warning service and rebuilding damaged properties to make them more flood-proof."

'It'll be harder to sell now'

Wot Blowers, 62, a self-employed gardener from Cockermouth, Cumbria, was rehoused through her insurance company following floods in the county in 2009

"It was awful. I was out of my home for nearly a year. I am back now, but it has taken the best part of a year to get the house fixed. The whole of the ground floor was flooded halfway to the ceiling.

"I probably have lost value on my house. I've been wanting to sell it for years, but it's going to be a lot harder now. My premium was £150 originally, but when I got my insurance renewal it was £2,111. I spoke to Trading Standards, but it's still higher than it was."

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Recruitment Genius: Account Manager

£20000 - £35000 per annum: Recruitment Genius: This full service social media ...

Recruitment Genius: Data Analyst - Online Marketing

£24000 - £35000 per annum: Recruitment Genius: We are 'Changemakers in retail'...

Austen Lloyd: Senior Residential Conveyancer

Very Competitive: Austen Lloyd: Senior Conveyancer - South West We are see...

Austen Lloyd: Residential / Commercial Property Solicitor

Excellent Salary: Austen Lloyd: DORSET MARKET TOWN - SENIOR PROPERTY SOLICITOR...

Day In a Page

Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there