Axa warns of house market ruin
Insurance boss claims many homes will be 'unsellable' if ministers fail to agree flood deal
Hundreds of thousands of homes
will be “unsellable”, devastating
regional housing markets, if the
Government fails to agree a deal
on flood insurance with industry
soon, claims the boss of AXA UK.
A 13-year-old agreement between Government and the Association of British Insurers ends in June. The deal sees the industry subsidise the policies of homes built on flood plains. But insurers argue the state has not upheld its side of the bargain, to invest heavily in flood defences, and is negotiating for a different system.
Despite the pressing nature of the issue – insurers paid out more than £1bn in flood-related claims last year – the talks have dragged on. Even if a new system were agreed now it could not be on the statute books by the end of June.
Only a temporary extension of the current deal could allow homeowners to avoid annual premiums reaching unaffordable levels of £30,000 or see their homes left without cover. Paul Evans, AXA UK’s group chief executive, warned that this would mean families would not be able to obtain mortgages.
He told The Independent on Sunday: “We are extremely concerned about the impact on homeowners. Homes would be unsellable. There would be the worst of both worlds: people would be trapped in homes that they couldn’t afford to insure and wouldn’t be able to sell.”
The current deal results in a typical premium of just £340 for houses where a pay-out from flood damage is usually more than £20,000. However, homeowners are already seeing significant hikes in their cover.
The home of Frank Burr, an 87-yearold pensioner in Wraysbury, Middlesex, has never been hit by floods in the 40 years he has lived there. This month he was quoted £2,900 for a policy with flood damage cover – without it cost just £1,900.
Up to 5.2 million homes have at least some risk of flood damage, with at least 200,000 particularly in danger. Insurers are looking to protect themselves by hiking premiums on homes that have only a remote possibility of being flooded.
Mr Burr said: “This place has never been flooded and is never likely to be flooded as I live in a high spot in the village. I’m paying for celebrities with homes on the Thames that always get flooded.”
Paul Cobbing, the chief executive at the National Flood Forum, added: “There will be consequences if there is a lack of solution. Housing markets over the next few months will change.”
- 1 Amy Winehouse statue unveiled in Camden
- 2 Lego breaks out of the toy box and heads for the gallery
- 3 George Galloway on Scottish independence: The political class is doing what Hitler couldn’t – destroying Britain
- 4 Headaches, fry ups, and hair of the dog - why do we get hangovers, and is there such thing as a 'cure'?
- 5 A bottle of wine a day is not bad for you and abstaining is worse than drinking, scientist claims
George Galloway on Scottish independence: The political class is doing what Hitler couldn’t – destroying Britain
Daniele Watts: Django Unchained actress detained in Los Angeles after being mistaken for a prostitute
Scottish independence: Nationalist leader Jim Sillars threatens pro-union companies with 'day of reckoning' after independence
Scottish independence: Yes campaign feels the heat as Alex Salmond's NHS claims come under furious attack
Scottish independence: Britain faces 'constitutional crisis' at next election
£23m Birmingham cycle scheme is attacked by Tory councillor for not catering to the elderly
iJobs Money & Business
£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
£35000 - £38000 per annum + Benefits: Ashdown Group: Training Coordinator / Pl...
Data Governance Manager (Solvency II) – Contract – Up to £450 daily rate, 6 month (may go Permanent)
£400 - £450 Per Day: Clearwater People Solutions Ltd: We are currently looking...