Housing associations could face a £10m hike in building insurance because of the increased threat of subsidence caused by the long hot summer.
The British Insurance Brokers' Association has said the current weather conditions would cause average building insurance premiums to rise by 10%.

Registered social landlords are already thought to spend in excess of £100m a year insuring their properties.

Subsidence occurs when soil under buildings dries out, leaving gaps, which can cause parts of a building to sink. The problem is exacerbated when rain returns, causing the soil to swell, making the building move again.

Any increase in insurance premiums would hit housing associations hard – insurance costs have risen steeply over the past two years. According to the National Housing Federation, the "vast majority" of registered social landlords insure their properties, as opposed to local authorities, which prefer to pay for repairs when problems arise.

Martin Lucas, director of finance for Western Challenge Housing Association, already spends £250,000 a year insuring his 7000 properties.

He said: "Last year our premiums rose 50-60%, this year they've risen another 20%. Spending time and money on insurance detracts from our business as it's not adding value to tenants."

Dr David Viner, senior research scientist at the climatic research unit at the University of East Anglia, said the problem would only get worse as global warming means hotter summers and wetter winters.

John Sparkes, professional information officer for the Royal Institution of Chartered Surveyors, said: "Clearing up subsidence can cost anything from £5000 to £50,000 a go and is intrusive and time-consuming.

"I think inevitably there will be a change in building methods, such as using piled foundations."

Source

Housing Today