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Buying a house with subsidence

So this seems like madness on the face of it, but has anyone ever done this / can recommend how to go about it?

Basically I am struggling to sell my first home and I reckon I can scrape enough together to get an acceptable second house with fantastic extension/development potential in a great location.

The one I have seen that is *just* in budget if I complete before June 30, but has subsidence.

To me - the key issues are twofold
1) Get it all properly surveyed and knock the underpinning cost off the asking price
2) Take a 20-25% discount to other properties in the area to make up for it.

Am I mad for even thinking about?

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Posts

  • elbowlohelbowloh Posts: 5,690
    Do you need a mortgage?
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  • shirley_bassoshirley_basso Posts: 4,415
    Yes I will. Will anyone lend, even with a condition to have the underpin contractor in place at completion (or something to that effect)?
  • singletonsingleton Posts: 1,917
    I haven't done it myself, can you get buildings insurance?
  • elbowlohelbowloh Posts: 5,690

    Yes I will. Will anyone lend, even with a condition to have the underpin contractor in place at completion (or something to that effect)?

    Not sure. It was a while ago, but we looked at buying a house years ago that had the underpinning already done and struggled to find a decent mortgage. there might be specialist lenders for this?
    Felt F1 2014
    Felt Z6 2012
    Red Arthur Caygill steel frame ??
    Tall....
  • nibnob21nibnob21 Posts: 207
    I'd also consider the re-saleability.
  • surrey_commutersurrey_commuter Posts: 13,624
    what is causing the subsidence?

    the cause of the subsidence may preclude your plans to extend.

    You will need a specilaist insurer which will mean high rates.

    I had subsidence due to a cracked pipe under the house, nobody would lend until the work had been done and then left for months to check it had worked.

    If the stamp duty holiday is that important then walk away
  • surrey_commutersurrey_commuter Posts: 13,624

    So this seems like madness on the face of it, but has anyone ever done this / can recommend how to go about it?

    Basically I am struggling to sell my first home and I reckon I can scrape enough together to get an acceptable second house with fantastic extension/development potential in a great location.

    The one I have seen that is *just* in budget if I complete before June 30, but has subsidence.

    To me - the key issues are twofold
    1) Get it all properly surveyed and knock the underpinning cost off the asking price
    2) Take a 20-25% discount to other properties in the area to make up for it.

    Am I mad for even thinking about?

    Just re-read this and if you are struggling to sell your first home the lastthing you want to be doing is to stretch yourself to the liit on a dodgy 2nd house.

    If the market goes into reverse for the next two years then you could find yourself having to do a firesale on one of them.
  • shirley_bassoshirley_basso Posts: 4,415
    Thanks all. I don't know any of the details (why and cost to correct) as I am seeing it tomorrow but it sounds like a non-starter.

    To some of the points raised:
    • Mortgage - obviously going to be the dealbreaker, but have a broker appointed as we have a non-straightforward financial situation so see what they say.
    • Resaleability - absolutely right, hence my 20-25% haircut
    • Extension - very good point so will consider that along with underpinning works
    • Insurance - need to work out how much more expensive it will be
  • shirley_bassoshirley_basso Posts: 4,415

    So this seems like madness on the face of it, but has anyone ever done this / can recommend how to go about it?

    Basically I am struggling to sell my first home and I reckon I can scrape enough together to get an acceptable second house with fantastic extension/development potential in a great location.

    The one I have seen that is *just* in budget if I complete before June 30, but has subsidence.

    To me - the key issues are twofold
    1) Get it all properly surveyed and knock the underpinning cost off the asking price
    2) Take a 20-25% discount to other properties in the area to make up for it.

    Am I mad for even thinking about?

    Just re-read this and if you are struggling to sell your first home the lastthing you want to be doing is to stretch yourself to the liit on a dodgy 2nd house.

    If the market goes into reverse for the next two years then you could find yourself having to do a firesale on one of them.
    I already am doing a firesale on one of them!
  • surrey_commutersurrey_commuter Posts: 13,624

    Thanks all. I don't know any of the details (why and cost to correct) as I am seeing it tomorrow but it sounds like a non-starter.

    To some of the points raised:

    • Mortgage - obviously going to be the dealbreaker, but have a broker appointed as we have a non-straightforward financial situation so see what they say.
    • Resaleability - absolutely right, hence my 20-25% haircut
    • Extension - very good point so will consider that along with underpinning works
    • Insurance - need to work out how much more expensive it will be
    when I sold my house post (insurance paid ) susidence work the buyers took over the policy (Direct Line to very mainstream) .

    Ask why current owner has not had it done on their insurance. They may not have any or it may not be on offer due to the nature of the subsidence
  • shirley_bassoshirley_basso Posts: 4,415
    edited 16 April
    The house looks like it has been neglected and I wouldn't be surprised if the former owner has died. It's liveable, but definitely a fixer-upper.

    How did you find selling it? I am working on a 20-25% haircut
  • wolfsbane2kwolfsbane2k Posts: 3,014
    I'm currently going through a claim for subsidence on my house due to tree root growth and last years significant dry spell, and i'd advise the following:

    Simple question:
    1) Is it "currently" subsiding,
    or
    2) has it in the past suffered from subsidence, which has been addressed, and you are provided with an underwritten statement guaranteeing for 100 years or so that it's been addressed.

    If it's 1), i'd
    1a) Gain an understanding of what investigations have been carried out to date, and why it hasn't been fixed under the existing house owners insurance. It may be in the process of being investigated, which may require any where up to 3 years to study the motion of the house (seasonaility) and identify the root cause, and then even longer to actually fix it.
    1b) If nothing has been done, consider that you'll be paying out of your own money to have it fixed - no new insurance policy will cover you for it. You might find it worthwhile having a chat with a local registered surveyor and groundworks business registered in subsidence works to perform the investigations as to what might be causing it, and then get quotes to address that - but the "remedial" work likely to be expensive, and potentially expansive, could involve chopping down protected trees, and do ensure that any quotes include provision of a guarantee

    If 2), Have a chat with insurance companies, with a copy of the guarantee in hand, and look at your options/quotes.

    Intent on Cycling Commuting on a budget, but keep on breaking/crashing/finding nice stuff to buy.
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  • DeVlaeminckDeVlaeminck Posts: 6,803
    We viewed a house with subsidence when we moved here 20 years ago. The floors were sloping enough that a marble on the floor boards would roll. As we couldn't get a mortgage on it it was a non starter but I do know the people that bought it found the problem was a leaking water pipe of some sort - had it all underpinned and repaired and it came in very much cheaper than the market value of those houses.

    Probably doesn't help much - one of those things that you can't sink money into investigating until you own the property and you don't want to own the property until you've investigated.
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  • elbowlohelbowloh Posts: 5,690
    I'd also say the flat I sold (after 4 years of trying) had "historical movement" identified in one survey commissioned by my first buyer and they pulled out.

    We had our insurers investigate and they said there was some minor cracking most likely caused by tree roots. They had the tree removed and the cracks repaired and all seemed ok - all done on the insurance. However, over those years I had 4 other buyers all pull out before completion, all were aware of the issue from the start and where given certificates of completion etc. I don't know why any of them actually pulled out, but it could have been a factor.
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    Red Arthur Caygill steel frame ??
    Tall....
  • surrey_commutersurrey_commuter Posts: 13,624

    The house looks like it has been neglected and I wouldn't be surprised if the former owner has died. It's liveable, but definitely a fixer-upper.

    How did you find selling it? I am working on a 20-25% haircut

    I already had a buyer and their survey found the subsidence, luckily they were happy to wait for the work and measurements to prove it was stable and then they completed. I did not take a haircut as they took over the insurance so were covered for future problems and he was a decorator so took cash rather than have the place redecorated on the insurance.
  • TrickyTreeTrickyTree Posts: 6

    So this seems like madness on the face of it, but has anyone ever done this / can recommend how to go about it?

    Basically I am struggling to sell my first home and I reckon I can scrape enough together to get an acceptable second house with fantastic extension/development potential in a great location.

    The one I have seen that is *just* in budget if I complete before June 30, but has subsidence.

    To me - the key issues are twofold
    1) Get it all properly surveyed and knock the underpinning cost off the asking price
    2) Take a 20-25% discount to other properties in the area to make up for it.

    Am I mad for even thinking about?

    Thought I would chime in as I am a mortgage broker and hopefully can help.
    Subsidence is structural movement and lenders will want to know if it is historic or current. This is normally flagged at valuation stage.

    Most lenders would want a structural engineers report to confirm.
    If historic you should be fine.
    If current then probably a no go.
    (I’m guessing I will be ok as most properties with ongoing movement are sold through auction)

    If it has been underpinned then you should be ok assuming the work was carried out a few years ago and no ongoing problems (plus the solicitor will want all the paperwork)

    Given the estate agent has mentioned it I would guess it has been underpinned. As long as it was 2-3 yrs ago and all the warranty work is in order you should be ok.
    Find out who the building is insured with and call them to check they would cover you.
    No buildings insurance no mortgage.
    Hope that helps

  • shirley_bassoshirley_basso Posts: 4,415
    The work has not been done - it needs doing. Estate agent has said so.
  • rjsterryrjsterry Posts: 19,770
    If you want to get a very rough idea of the cost of underpinning, it's about £1k per metre length + VAT. Multiply that by the length of wall you need underpinning and that will give you an order of magnitude. You also need to consider redecoration costs, plus replacement doors and windows if affected, and if the house is attached to another, the hassle of party wall negotiations and potential making good to the neighbour as well.
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  • shirley_bassoshirley_basso Posts: 4,415
    Thanks for all your comments.

    All I know at present is it has subsidence and needs underpinning The quote has been £5k to resolve but I don't believe it. I've read it can cost £6k-£20k to fix and has a 20-25% impact on value.

    So do you think I should look to get work / insurance covered then sort mortgage?
  • shirley_bassoshirley_basso Posts: 4,415
    edited 16 April
    rjsterry said:

    If you want to get a very rough idea of the cost of underpinning, it's about £1k per metre length + VAT. Multiply that by the length of wall you need underpinning and that will give you an order of magnitude. You also need to consider redecoration costs, plus replacement doors and windows if affected, and if the house is attached to another, the hassle of party wall negotiations and potential making good to the neighbour as well.

    Thanks RJS.

    Every penny of cost is coming straight off my offer price - so the more the better!

    I do like it and the potential is amazing but only at the right price.
  • DeVlaeminckDeVlaeminck Posts: 6,803
    20% off value if it's been underpinned - a bit like a repaired insurance write off?


    I'm surprised it's that much. I'd certainly be looking for underpinned houses to buy if that's true.
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  • elbowlohelbowloh Posts: 5,690

    Thanks for all your comments.

    All I know at present is it has subsidence and needs underpinning The quote has been £5k to resolve but I don't believe it. I've read it can cost £6k-£20k to fix and has a 20-25% impact on value.

    So do you think I should look to get work / insurance covered then sort mortgage?

    It cost our insurer £10k just to remove tree, repair internal/external cracks and redecorate. That's without underpinning!
    Felt F1 2014
    Felt Z6 2012
    Red Arthur Caygill steel frame ??
    Tall....
  • shirley_bassoshirley_basso Posts: 4,415

    20% off value if it's been underpinned - a bit like a repaired insurance write off?


    I'm surprised it's that much. I'd certainly be looking for underpinned houses to buy if that's true.

    That's what google says.
  • shirley_bassoshirley_basso Posts: 4,415
    elbowloh said:

    Thanks for all your comments.

    All I know at present is it has subsidence and needs underpinning The quote has been £5k to resolve but I don't believe it. I've read it can cost £6k-£20k to fix and has a 20-25% impact on value.

    So do you think I should look to get work / insurance covered then sort mortgage?

    It cost our insurer £10k just to remove tree, repair internal/external cracks and redecorate. That's without underpinning!
    Ha. I didn't think £5k was realistic!
  • ugo.santaluciaugo.santalucia Posts: 26,136
    The stress involved will take over your life and no house is worth that much.

    But maybe that's me, every time I see Grand Design I feel for those people...

  • TrickyTreeTrickyTree Posts: 6

    The work has not been done - it needs doing. Estate agent has said so.

    Ok so all banks will instruct a surveyor to carry out a mortgage valuation.
    The surveyor will want a structural engineers report to determine what needs doing.
    If structural work is required, most banks will want the work completed before they will lend.

    Has the owner had a report carried out or is the estate agent guessing?
    From what you have said I don’t see you getting a mortgage or buildings insurance.
  • shirley_bassoshirley_basso Posts: 4,415

    The stress involved will take over your life and no house is worth that much.

    But maybe that's me, every time I see Grand Design I feel for those people...

    It's not a grand design, I assure you.
  • elbowlohelbowloh Posts: 5,690
    If the the seller has insurance, i would get them to instigate the claim process now?
    Felt F1 2014
    Felt Z6 2012
    Red Arthur Caygill steel frame ??
    Tall....
  • ugo.santaluciaugo.santalucia Posts: 26,136

    The stress involved will take over your life and no house is worth that much.

    But maybe that's me, every time I see Grand Design I feel for those people...

    It's not a grand design, I assure you.
    ... but it might end up being equally stressful...

    Think like a French, you don't want that shxt in your life, what you want is cassoulet and Beaujolais Nouveau
  • shirley_bassoshirley_basso Posts: 4,415

    The work has not been done - it needs doing. Estate agent has said so.

    Ok so all banks will instruct a surveyor to carry out a mortgage valuation.
    The surveyor will want a structural engineers report to determine what needs doing.
    If structural work is required, most banks will want the work completed before they will lend.

    Has the owner had a report carried out or is the estate agent guessing?
    From what you have said I don’t see you getting a mortgage or buildings insurance.
    Thanks Tricky. I think you're right and I understand the reason it hasn't sold is because of inability to get a mortgage. I'm keen to find a way to make it work and cheaply.
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