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Waters are rising on insurance problem

Apparently, our climate is warming up. Perhaps more believably at present, there is also a related risk of more severe and frequent flooding across the land.

Quite understandably, the insurance industry has been getting jumpy about this for some time, but it agreed with the government to continue insuring all properties until June 2013 while seeking a longer-term solution.

So we have a year to go before we really have to worry, right? I’m afraid not. There is already evidence of unwillingness to renew policies that are ending now on riskier property, if by doing so a policy extends past this deadline.

With annual policies the norm, that means the problem could start to hit from June this year.

The industry needs to think about this carefully. No insurance means no mortgage in most instances. In a worst-case scenario, property in the wrong area could become unsellable apart from to cash buyers, pushing prices down as a further unwelcome by-product.

Home owners could find moving from a risk zone impossible unless they are prepared to take a lower cash offer.

It’s no surprise that we are seeing an increased appetite from lenders for data on flood plains and propensity for flooding in relation to mortgage applications and back books.

Without a renewed agreement, it will increasingly be necessary for interested parties, including brokers to use a combination of local valuers and data analytics.


Most mortgage fraud takes place in the B2L sector, says PMS boss

The buy-to-let sector is where most of the fraudulent activity in the mortgage market is occurring, according to John Malone, executive chairman of PMS. Speaking at the Mortgage Business Expo in Manchester last week, Malone, who is also brokers’ representative on the National Fraud Authority’s Mortgage Fraud Forum, told delegates: “There is a big problem […]

High street woes propel bridging towards peak

The bridging sector is forecast to hit £1.5bn by the end of the year, although some believe the market is close to its peak. Last week West One Loans claimed the value of the industry has broken the £1bn barrier for the first time and is set to reach £1.5bn by the end of 2012. […]


Don’t blame MMR for low lending, says FSA

The Financial Services Authority has dismissed suggestions that the Mortgage Market Review is responsible for a drop in lending levels and a more risk-averse market. Some industry commentators have previously criticised lenders for implementing parts of the MMR before the FSA has introduced its final rules, especially in interest-only lending, where lenders have significantly tightened […]

India rate cut – more to come?

Kunal Desai, Head of Indian Equities at Neptune Investment Management India’s stockmarket rallied this week following news that the central bank was cutting interest rates more aggressively than expected. Commenting on the rate cuts and what this means for India’s economic growth, Kunal Desai notes that there were two important details in the announcement that have […]


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