Does Flood Risk Affect a Mortgage? All You Need to Know
When rivers burst their banks and drainage systems reach maximum capacity, untold damage can be done to properties and infrastructure. According to the Environment Agency, as many as 5.2 million properties across England are considered to be ‘at risk’ of flooding. That’s one in six. 2.8 million of those could flood as a result of surface water alone.
These are alarming statistics, but, happily, it’s easy for buyers to determine whether a prospective purchase is in a flood risk area or not. Flood risk surveys and history checks can tell you everything you need to know about the home or business unit you’re looking to buy.
But what if you fall in love with a property in a flood risk area? Or perhaps you’re considering investing in a home or business premises that you’ve since learned is at risk of flooding?
It is advisable to undertake a flood risk report when buying a house to receive a robust blend of the most up-to-date flood risk data available.
Is your mortgage likely to be more expensive as a result of the house’s flood risk status? Let’s find out.
Will your mortgage be more expensive?
In a roundabout way, it could be. Some lenders aren’t willing to offer mortgages on flood risk properties, particularly those at higher risk (Zone 3a or 3b) areas. As a result, you may have fewer options available to you. The lenders with the lowest rates might refuse your mortgage application, forcing you to go with a pricier alternative.
Even if you do secure an affordable mortgage, you can expect your insurance costs to increase. The cost of buildings and contents insurance can rise significantly if your property is at risk of flooding, even if you shop around to find the best deal. There’s no getting away from it: owning a flood risk property is going to cost a little more than an equivalent building with no history of flooding.
That’s why it’s so important to get a flood risk assessment completed on your prospective purchase. Our FCI Flood Appraisals can give you detailed information about the status of the property, including the likelihood of flooding, potential sources of flooding and even suggested actions to reduce the risks. To learn more and order your appraisal, please get in touch with a flood risk consultant today.