Flood defence cuts 'risk collapse of property market'
Edited by Bob Witham.
Government cuts to flood defence spending could make it harder for millions of residential property
owners to secure insurance and may even lead to the "collapse" of the housing market, an analyst has warned.
Jardine Lloyd Thompson partner and chair of the British Property Federation's insurance committee Bill Gloyn told a conference that an agreement between the industry and Whitehall to provide cover to homes in high-risk areas is dependent on continued investment in protection measures.
However, the comprehensive spending review saw chancellor George Osborne cut the budget for flood defences for 2011 to 2015 by £216 million to £500 million.
This left it "substantially" below the investment of £1 billion a year until 2035 recommended by the Environment Agency to maintain the current level of protection.
Mr. Gloyn warned this reduction will see insurers either raise their premiums or withdraw cover altogether, which would have consequences "almost too frightening to contemplate".
"Without insurance, there is no mortgage. Without mortgages, there is no property market," he said.
In October, AA Insurance director Simon Douglas claimed cuts to flood defences could leave thousands of households "uninsurable".