At a glance 

• All lenders require borrowers to have suitable buildings insurance with flood cover as a condition of their mortgage. The availability and cost of flood cover can be a concern, particularly in high flood risk areas. 
• Flood insurance costs can affect mortgage affordability and the amount a lender might lend. Properties could become un-mortgageable if the cost of insurance became prohibitive. 

In April 2016, government and insurers implemented the Flood Reinsurance Scheme, called Flood Re, to protect eligible households in high flood risk areas.  

Currently, the scheme only accepts domestic buildings insurance policies. This means that homes insured on commercial policies, such as most leasehold homes or landlords? properties in the private rented sector, are excluded.   

At a glance 

• All lenders require borrowers to have suitable buildings insurance with flood cover as a condition of their mortgage. The availability and cost of flood cover can be a concern, particularly in high flood risk areas. 
• Flood insurance costs can affect mortgage affordability and the amount a lender might lend. Properties could become un-mortgageable if the cost of insurance became prohibitive. 

In April 2016, government and insurers implemented the Flood Reinsurance Scheme, called Flood Re, to protect eligible households in high flood risk areas.  

Currently, the scheme only accepts domestic buildings insurance policies.  This means that homes insured on commercial policies, such as most leasehold homes or landlords? properties in the private rented sector, are excluded.

Our position

We would like the scheme to be more inclusive and provide protection for a wider range of households - including more of those which are commercially insured in the leasehold sector, as well as homes in the private rented sector, which are subject to buy-to-let finance. 

Why this is important for lenders

All lenders require borrowers to have suitable buildings insurance with flood cover, as a condition of their mortgage. The scheme is important because it ensures borrowers in high flood risk areas can obtain and afford the flood insurance they need. 

Without the scheme, there would be implications for existing and new lending if borrowers were unable to obtain or afford buildings insurance with flood cover.