Mortgages And Flood Risk

Discussion in 'General Discussion' started by developer, Oct 15, 2016.

  1. developer

    developer MB Club Veteran

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    Some advice please guys.

    We're looking at a property, however, a Groundsure environmental search has revealed it has a medium risk from river flooding and a high risk from surface water flooding.

    This means it's been given a Black 1 JBA Insurability rating.

    River Flooding (Medium Risk)
    We know the property well, as it's just down the road from where we live, so we know that the "river" is only 6 feet wide, is 100m away from the property and at a significantly lower level than the house.

    Surface Water Flooding - Pluvial (High RIsk)
    The road the house is on has a slight but low point in, and four houses have been built in the low point, all constructed around the 1930's - we're not talking new built here.

    Despite the Black 1 insurance rating, I can easily get 35+ "normal" quotes from GoCompare with premiums as low as c£200 to £300, even after stating there is water within 150m - the property value is c£350K.

    Also, we know the neighbours in the area and they say the houses have never flooded - this is borne out by an Environment Agency report too, which confirms there has never been an instance of flooding.

    So, my question:
    We will be renovating the house and selling it on - will potential buyers be able to get a mortgage in light of the above, or is the property blighted?

    We're talking statistical risk assessment info here, not an actual event of flooding, but will the mortgage companies take it as chapter and verse?

    I'm interested in replies from mortgage brokers or surveyors, based upon their experience please.

    Thanks :thumb:.
     
    Last edited: Oct 15, 2016
  2. PobodY

    PobodY Hardcore MB Enthusiast

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    My grandparents house was in a similar situation. - It was in a new development near the top of a hill on the other side of the train tracks from the river... but the postcode put it in a town that has a flood risk.

    It was definitely resolved reasonably easily because the new buyers were in South Africa when it was sold, and there was a bit of to-and-fro with solicitors earning their fees.
     
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  3. OP
    OP
    developer

    developer MB Club Veteran

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    One of the four was sold within the last 6 months and, I understand, was subject to a mortgage, but a sample of one isn't conclusive enough.
     
  4. davidjpowell

    davidjpowell Hardcore MB Enthusiast

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    Few years since I did any serious valuing.

    However most lenders criteria were designed to protect their security, can't imagine that has changed, and whether insurance is available or not will be key.

    https://www.google.co.uk/url?sa=t&r...hQKK1g25yEBmr9qPZlE8Dg&bvm=bv.135974163,d.ZGg
    https://www.google.co.uk/url?sa=t&r...PZnB-8FZ86ry5GLSDXZByg&bvm=bv.135974163,d.ZGg

    It's a bit of a specialist area that I suspect many brokers/surveyors will only come across on an occasional basis.

    There is RICS guidance out there, but it's more about the effect on value than Lending Criteria.
     
  5. OP
    OP
    developer

    developer MB Club Veteran

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    That's very helpful, thank you - in both cases it seems there is some acceptability of a property that's at risk, provided the valuer deems it suitable.

    If you saw the property you'd be hard pushed to see a problem.
     
  6. Charles Morgan

    Charles Morgan MB Club Veteran

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    My house is shown as at high risk of groundwater flooding (as my solicitor advised me at the time) yet conversations with neighbours who had been there for 50 years confirmed that it was bonkers. An entire development of 20 houses has just been completed about 500 yards downstream and all seem to have sold (some have to have been mortgaged).
     
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  7. PobodY

    PobodY Hardcore MB Enthusiast

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    I think common sense prevails once a physical (rather than paper) inspection is done; the area may technically be at risk of flooding, but a quick look would show that the house isn't.

    Having said that, I'm always surprised when someone buys a house in "Mill Pond Close" or something similar, and they didn't think that might have been a clue when the mill pond fills up again and the house floods.

    Even if you are at risk of flooding, that's clearly something that can be overcome. - My uncle lives on the North Norfolk coast and although the house didn't flood all the out-building did a couple of years ago. Hasn't done the underside of his W220 any good, but insurance paid-out for the damage to his fridge etc.
     
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  8. Lagerlout

    Lagerlout Hardcore MB Enthusiast

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    My house is in a high groundwater area, and the houses up the road from me flood, the ones down the road get close to flooding, but my house misses it due to it being higher than the others. It's an inexact science and if your neighbours say it doesn't flood and there isn't anything on record then I wouldn't let it put you off. It's obviously still a risk, but probably very minor.
     
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  9. OP
    OP
    developer

    developer MB Club Veteran

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    Thanks - because we're not borrowing against it, I want to ensure we don't spend 3 months and c£30K+ only to find out we can't shift it - I tend to err on the side of caution with property, due to the size of figures involved.

    The flood reports make it seems like a no no, but the reality is somewhat different, it seems.
     

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