Flood Re turned ten this year, and its birthday present to itself was a reform package announced back on July 1 alongside Defra: cheaper contents cover for lower council tax bands, a future cap on claims, and a new certification scheme meant to reward homes that have actually done something about their flood risk. Insurance Business covered the announcement in detail at the time, and the scheme's own annual results, published a few weeks later, showed a fund in decent financial health going into the changes: £48.8 million in profit, a solvency ratio up to 324%, and 353,000 policies ceded over the year.
What's had less airtime is a gap that trade body Propertymark has been flagging since long before this reform round, and which the July package does nothing to close. Leaseholders, private landlords, homes built after 2009 and some properties in larger blocks still can't access Flood Re at all. For brokers placing landlord or buy-to-let cover, that's not a footnote. It's the difference between a client having somewhere to fall back on when a flood claim pushes their premium through the roof, and having nowhere to go.
And it’s an important issue – the UK is no stranger to floods – “Flooding has long been recognised as a significant risk in the UK due to its widespread occurrence and, often, severe impacts. As a country known for its frequent rainfall, flood risk is an established and well-understood challenge,” Claire Wilkinson, managing director of alternative risk transfer solutions at WTW told Insurance Business in an interview.
The mechanics of what's actually changing are straightforward enough. From April 2027, Flood Re will cut what it charges insurers for contents-only policies in council tax bands A and B from £52 to £25 a year, with the saving expected to be passed on to renters and lower-income households. The logic is fairly blunt: Flood Re has spent more in three of the past four years repairing homes in bands G and H, which make up under 4% of UK housing stock, than on bands A and B, which make up around 45%. From 2028, a cap will also limit how much of any individual claim insurers can pass on to the scheme, with costs above that threshold sitting with the insurer instead.
The more interesting long-term shift is Flood Performance Certificates, modelled loosely on Energy Performance Certificates. Instead of pricing flood risk mainly off a postcode, insurers would eventually be able to price off what a specific property has actually done to protect itself, and reward it with a discount. Reinsurance Business has reported that the FPC framework is due to be piloted by the end of 2026, with integration into discounted pricing targeted for 2028. Homeowners doing resilience work now, brokers might want to remind clients, should be keeping every invoice, spec sheet and guarantee, because that paperwork could eventually translate into a cheaper premium.
None of that helps the households Propertymark is most concerned about, though. In its own response to a 2021 Flood Re consultation, the trade body warned that excluding leasehold and buy-to-let properties was creating a two-tier market, and it's still making the same argument now. Water and flooding minister Emma Hardy has said eligibility, including how the rules apply to leaseholders, will stay under review, but there's currently no plan to extend the scheme to businesses, and no firm timeline for leaseholders either.
That matters more than it might have five years ago. The backdrop keeps getting wetter, literally: the Environment Agency puts around 6.3 million English properties at flood risk today, a figure it expects to reach roughly 8 million, one in four homes, by mid-century. Aviva has separately found that 11% of new homes built in England between 2022 and 2024 sit in areas of medium or high flood risk, up from 8% in the decade before, which is awkward given that homes built after 2009 fall outside Flood Re's safety net entirely regardless of how exposed they are.
For brokers, the practical upshot is that "check if your client's property is Flood Re-eligible" needs to be an earlier question in the conversation than it used to be, not a footnote discovered at renewal. Landlord and leasehold clients in flood-exposed areas may simply have no scheme to fall back on if premiums spike or availability tightens, and with claims currently running below Flood Re's own expectations, per its latest results, there's little external pressure forcing insurers to solve that gap voluntarily. Propertymark is still pushing for it to close before Flood Re's planned 2039 exit. Until it does, that's a conversation brokers will keep having to have themselves.
