Flooding leaves property owners blighted by a lack of insurance
Flood-hit homeowners could experience more problems when the time comes to sell their property. Sharon Dale reports.
WHEN Sally Henry agreed a sale of her thriving B&B in Hebden Bridge in June last year, she was pleased to accept the offer of £540,000.
It was a fair price for the beautiful Georgian house and a business rated five star gold. But just days before the exchange of contracts, a devastating flood engulfed the town and washed Sally’s dreams away.
Her converted basement was wrecked, the buyer pulled out and now, less than a year later, the detached home is languishing on the market at offers of about £350,000 after losing almost £200,000 of its value.
The main issue, according to Sally, is that insurers are no longer willing to insure the property against flooding and lenders won’t give buyers a mortgage without it.
“It’s horrific. I feel like I lost absolutely everything on that day. The house is now worth half what I paid for it in 2009,” she says.
About 6ft of water seeped into the lower ground floor, which housed an apartment, two letting bedrooms,a laundry, boiler room and store rooms. The rest of the property, which is on the market with Charnock Bates, was unaffected. It includes a dining area, sitting area, separate sitting room, kitchen and two en-suite bedrooms on the ground floor plus four bedrooms and two bathrooms on the first floor. Outside, there is parking for eight cars and gardens.
“It’s on at a very low price now and there are lots of people interested in buying it but they can’t get a mortgage because of the insurance issues. I need a cash buyer and very few people have got that amount of cash,” says Sally, who has bought another home in Kent.
Sally is one of the worst casualties of the Hebden Bridge floods last summer, but she isn’t alone. Even Simon Waring, who runs insurance specialist Ryburne Brokers, can’t get contents cover for his shop on Market Street.
He has, however, managed to help other flood victims to find a way around the insurance issue, which has threatened to scupper property sales.
“Sally is an extreme case and you can see why insurers are wary. They are commercial businesses and their profit margins for home insurance are surprisingly low.
“But we have managed to put a case for other homeowners who have faced a similar problem. We work with one company who will insure our clients if cover is either excluded for the basement or you agree to pay a large excess. These conditions mean that buyers can still get a mortgage.”
There could also be hope for whoever buys Holme House.
“It’s a lovely property and with some flood defence work it could be insurable, albeit with a high excess,” says Simon, who adds that the trend for converting cellars is causing big issues.
“If a cellar floods then it’s not such a big deal. Maybe a few tools get damaged. It’s not that uncommon. There’s a stream running under my house and water gets in after heavy rainfall but I have a sump pump installed to take the water away. When you have a £230,000 kitchen down there it’s another matter altogether. I’d say think twice before converting.”
He suggests that those with property prone to flooding and those thinking of buying a home in a high-risk area, should get an assessment by a chartered surveyor
The flood survey will highlight how you can protect a property by installing walls, flood gates and pumps and by raising wiring above flood level.
“It does work, especially the gates. We have also put all the wiring high on the wall in our office and that protects our telecoms if water gets in. I know of another shop owner in Hebden Bridge who siliconed his door up when we got the flood alert and that worked brilliantly. It only cost him a fiver,” says Simon.
“You can get these measures tested by pumping water in and then you can record it and show insurers that it works.”
Sally has lobbied Prime Minister David Cameron for a Government subsidised scheme that ensures property owners can always get insurance.
“The fact is it may not be the home owner’s fault. Floods can happen because of poorly maintained drains and defences and it seems very unfair that we are suffering because the authorities haven’t done their job properly.
“That’s why we need a government fund. Other home owners are going to have the same problem as me. They won’t realise until they try to sell their house.”
Proposals are in the pipeline, though Simon believes they will take time to implement and could be controversial when they are proposed.
“It could mean that everyone pays 20 per cent more for home insurance whether they live in a flood-prone area or not. Unless the Government is willing to subsidise it, there is no easy solution.”
Even if you manage to get insurance it is likely to include a large excess and that could affect saleability.
“It will limit your market and possibly the price,” he adds. “I doubt whether a lender will give a 95 per cent mortgage on a property with a £10,000 excess.”
For details on Holme House, New Road, Hebden Bridge, is on the market for £350,000 with Charnock Bates, tel: 01422 380100, www.charnockbates. co.uk
Ryburne Brokers, Hebden Bridge, www.ryburne.co.uk
NO GO: Holme House in Hebden Bridge has seen £200,000 lopped off its value after flooding in the town last June. The converted basement of the bed and breakfast accommodation took in water and now insurers will not offer cover for the house, leaving potential buyers unable to raise a mortgage. The house has a dining area, sitting area, separate sitting room and six bedrooms.