Post-flood property market under threat

Agents warn of a "dramatic negative effect" on the property market in flood-hit areas of the country.

"Insurance claims are going to be a real hindrance to people looking to sell a pub that has been flood damaged," said David Morgan of DMP Cookseys.

"The fittings and fixtures insurance is straight forward, but the money lost from the tills will take a lot of time and effort to recover. It's important to remember that flood victims will only be able to claim net profits back - not actual turnover, and this process can take up to nine months and it's certainly not in the insurance companies' interest to speed up claims."

Stephen Taylor, of Guy Simmonds, said: "It is going to have a very significant impact, but it's important not to be negative - the trade has a history of being resilient."

He continued: "Every case will be different but it might be worth waiting a while if you're planning to sell a pub that has been flooded or has had its trade affected."

People attempting to buy pubs in flood-hit areas will find it hard to get finance because lenders will stipulate that the pub must be fully insurable - especially if the property is a freehold.

Paul Thompson, of Acorn Finance, a company that specialises in arranging finance for buying property, said: "You may find a few specialist lenders that would finance a buyer looking to buy a property with no insurance, but insurance is generally a requirement."

Some insurers will always insure a property, even if it floods regularly, but the premium is likely to be high. Some operators in flood-prone areas lower their insurance premiums by minimising flood damage through the design of their pubs.

"It's going to be harder to sell pubs in these areas. Even if a pub has flooded for the first time in 300 years, people are going to think twice. We'd always do a flood-risk assessment on any pub we sold as part of our quality assurance," said Morgan.

There is also concern that a weak residential market in Gloucestershire and Oxfordshire will have a knock-on effect on the pub property market: "People planning to sell residential interests as a way of getting into the trade will have less capital to play with. It could change a lot of people's plans," said Taylor.

"Most of the areas that have been affected rely very heavily on summer revenue and this flooding will really hit their accounts," said Graham Allman, of GA-Select.

"I don't think it's all doom and gloom, though. This is the worst flooding for 200 years and if a pub hasn't been flooded it's unlikely it ever will be - I think that will give a lot of sellers a real boost and instill confidence in buyers. A lot of bad things have happened to this industry, but we've always bounced back."