More than 5 million homes and 4 million small businesses will not have access to the government's affordable flood insurance scheme, a property trade body has warned.
While the Prime Minister has pledged £130 million to help flood operations across Britain in the wake of severe storms that have battered the South West, the British Property Federation (BPF) said the move won't compensate long term for "a lack of affordable flood cover within communities most at risk".
The affordable flood insurance scheme, known as the 'Flood Re' proposals, currently exclude all leasehold flats, small to medium-sized enterprises and private rented properties from building insurance.
This is despite the fact that one in six of those properties is at risk of flooding in the UK, said the BPF.
For small businesses in high flood risk areas in particular, the impacts of being excluded from Flood Re "could be financially devastating" it added, citing research that found over a quarter perceive extreme weather conditions to be a 'real threat' to their business.
Ian Fletcher at the BPF said: "We are witnessing the devastating effects that floods have on people's livelihoods. By excluding millions of properties from its new flood insurance scheme, those who are unable to punch their weight in the insurance market - individual homeowners in leasehold flats, small independent businesses and buy to let landlords – the government is exposing people's homes and livelihoods to risk, greater financial burden and insecurity."
He added: "We would urge government and the insurance industry to reconsider these unnecessary exclusions, which will hit the smallest hardest. The huge costs of repairing a property after a flood is easily enough to bring a small business to its knees, and excluding individual home-owning leaseholders purely on the basis that insurers' IT systems can't cope is a poor excuse.
"Flood insurance is not a luxury for some to afford - it is a necessity."