Millions of excluded leasehold and private rented homes have been left to “sink or swim” - British Property Federation

David Cameron has been accused of helping the rich to access affordable insurance following a report yesterday that he was backing the inclusion of council tax band H homes in Flood Re.

A Whitehall memo seen by the Financial Times, said the “The PM and Mr [Oliver] Letwin were strongly in favour of this change,” but the noted added: “The decision is not public.”

In response The British Property Federation (BPF) has criticised Cameron for helping the country’s wealthiest home owners to access the government’s affordable flood insurance scheme, while leaving millions of excluded leasehold and private rented homes “to sink or swim” on the open market.

BPF director of policy Ian Fletcher said: “It seems incredible that the government would make a concession for one group of well-off homeowners, and yet leave out another less well-off group.

“This is an issue of basic fairness – all home owners should be treated equally in the Flood Re scheme and have access to affordable cover. It should not matter how wealthy they are, or if they live in a house or a flat. So far as flood cover is concerned we do not appear to be ‘all in this together’.”

BPF says data from the Leasehold Knowledge Partnership estimates that there are at least 800,000 leasehold properties in England that are in flood risk areas, with 70,000 of those at high risk.

An alliance of trade associations, including BPF and the Council of Mortgage Lenders (CML) has previously claimed that millions of properties are likely to be excluded, including five million leasehold properties and four million homes let out by private landlords, rather than the industry-cited estimate of 9,000 homes.

Flood Re will also exclude residential private landlords, housing association homes, SMEs, houses built after January 2009 and council homes.

Biba has welcomed the news of the Prime Minister’s support for band H inclusion but says the government still needs to go further to include small businesses.

Chief executive Steve White said: “We have lobbied hard for this protection for homeowners, but the government needs to go further. It is a retrograde step to exclude small businesses and let properties, which are currently afforded protection in the existing Statement of Principles.”

Executive director Graeme Trudgill added: “While brokers can often help with non-standard risks, our members are concerned that for those risks excluded from Flood Re, it may not always be possible to find a competitive premium.”