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.”
New UK station Russia Today gives a very bizarre view of Britain
By performing as African Americans or Indians, white people get to play act a kind of 'imaginary liberation', writes Michael Mark Cohen
New essay by JK Rowling went live on Pottermore site this morning
Top Gear presenter is no stranger to foot-in-mouth controversy
- 1 Canadian actor punched in face after 'Islamophobia' experiment goes wrong in wake of Ottawa shooting
- 2 Topshop at centre of row over body image as 'shocking' skinny mannequin photo goes viral
- 3 Top Gear presenter Jeremy Clarkson criticised for beer tweet
- 4 The bubble bursts for Sodastream
- 5 If you think Russell Brand’s new book is confused, you should read what his critics have to say about it
'Nasa Confirms Six Days of Darkness in December': No, they don't - it's a hoax
Top Gear presenter Jeremy Clarkson criticised for beer tweet
The bubble bursts for Sodastream
Russian politician says Apple CEO Tim Cook should be 'banned' from country after coming out as gay
'Santa Claus' dead: John Moore starred in Coca Cola and Morrisons adverts
Pope Francis declares evolution and Big Bang theory are real and God is not 'a magician with a magic wand'
Huge surge in Ukip support after EU funding row, according to new poll
Ukip ‘exploiting grooming scandal’ to secure party’s first police chief
Nigel Farage: 'There’s nothing wrong with white people blacking up'
Maureen Lipman says 'she can't vote Labour while Ed Miliband is leader'
Muslims, immigration and teenage pregnancy: British people are ignorant about almost everything
iJobs Money & Business
£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...
£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...
£20000 - £23250 Per Annum pro rata: Clearwater People Solutions Ltd: Pro rata ...
£40 - 48k + Benefits: Guru Careers: We are seeking a Marketing Manager to join...