Leasehold property owners may not be covered by Flood Re - BPF

The British Property Foundation (BPF) has hit back at claims from the ABI that “Flood Re will cover domestic properties, regardless of whether leasehold or freehold”.

Flood Re only covers non-commercial insurance policies. The BPF says that as the majority of leasehold properties require insurance to be bought on a block basis, building insurance is considered to be a commercial deal and so will not be covered in the new proposals.

BPF director of policy Ian Fletcher said: “It is misleading to suggest that the majority of the leasehold sector will be able to get buildings cover through the current arrangements for Flood Re. The ABI’s response does not take into account how leasehold works.

“People who live in leasehold properties will be able to insure their contents, but that will be cold comfort to them if they cannot afford to repair the structure of their home, replace their kitchen or mend their pipes and electricity cables.

“The vast majority of flats are leasehold and insured on a block basis to ensure that there are no gaps in cover. This is a necessity for all leases, whether in a block of four flats or 400 flats. We would urge the ABI and government to rethink this aspect of their proposals.”

Official census data shows that there are 3,137,000 homes in the private leasehold sector, and 773,000 leasehold conversions in former houses, which are likely to be in small blocks run by leaseholders.

The BPF is urging the government to take this into account ahead of the second reading of the Water Bill in the House of Lords on Monday 27 January.