I have agreed to purchase a property – how to I establish whether Buildings Insurance is going to be a problem?

One of the standard searches that is carried out as part of the conveyancing process – the Environmental Search – will reveal whether the property you are purchasing is potentially at risk from flooding and will also give details as to the type of flooding risk.

If you have concerns about the potential flood risk you may instruct your conveyancer to undertake an additional search, known as a ‘flood check search’.  The cost of this additional search is currently in the region of £25.00.

Although this has yet to become “common practice” the effect of The Water Act 2014 Provisions may well lead Mortgage Lenders to insist that this additional search is carried out in all cases of properties located in an area of potential flood risk.

What is certain is that Lenders are now becoming increasingly specific with regard to their insurance requirements, and if these requirements cannot be satisfied they may well look to withdraw a Mortgage Offer that has been issued.

Although there is no requirement to put insurance on risk until contracts have been exchanged (and indeed many insurance companies will not set up a Policy until a moving date has been fixed) it is prudent to start checking the position with regard to the ability to obtain insurance and in particular flood risk insurance.   With regard to flood risk insurance you will need to check:-

  • the availability of flood risk insurance for the property;
  • the cost of insurance for your property (including flood risk insurance);
  • the amount of excess you will have to pay in the event of a claim.

By doing this hopefully you will be able to establish that there will be no problem or, if there is, you will be in a position to liaise with your Lender or decide to withdraw, before matters have got too far and too much expense has been incurred.

Indeed, if you are looking to buy a property which you suspect will be in a “flood risk area” it would be advisable to establish the position with regard to insurance before  making any Mortgage application or your solicitor has commenced work on the file.

For more information with regard to the above or to discuss any other aspect of a residential property transaction please do contact us at the office most convenient for you or email conveyancing@thursfields.co.uk

Thursfields conveyancing solicitors are available at any of our offices and surrounding areas –Birmingham, Worcester, Kidderminster, Solihull, Halesowen, Sedgley and Stourport.

 

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