Possible subsidence issues on new purchase?

by Readers Question

8:43 AM, 10th August 2016
About 2 years ago

Possible subsidence issues on new purchase?

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Possible subsidence issues on new purchase?

A friend is looking to buy a property but discovered that it may have been built on a farm or small landfill site. subsidence

The conservatory was replaced and underpinned (insurance claim).

Homebuyers report and brief inspection by a structural engineer show no problems.

How easy would it be to insure? (some brokers have already refused to quote) and how much additional premium would be expected?

What effect is this likely to have when they come to sell?

All advice welcome!

Claire



Comments

Neil Patterson

8:53 AM, 10th August 2016
About 2 years ago

Hi Claire,

My first job in the mortgage industry was at Barclays in 1994, I have been in and around it ever since, and have seen thousands of people and mortgage applications.

Yes the Homebuyers report may be Ok, yes you may be able to get insurance now at a premium, but my advice if there is any hint of subsidence and you are not committed already is to walk away now.

It is just not worth the risk of issues in the future as subsidence can cause massive problems when you come to sell, remortgage or insure and it sounds like the land could also have unknown Issues.

Unless you are a builder/engineer and are buying at a massive discount knowing the risks think more than twice.

Other people may have positive experiences but no one can tell you it will be fine forever with certainty.

David Price

9:39 AM, 10th August 2016
About 2 years ago

Agree, walk away, subsidence can be a massive problem.

Mike Amapola

10:13 AM, 10th August 2016
About 2 years ago

I agree with David, walk away. The very thoughts that you are having right now about the risks and insurance difficulties etc. are exactly what a future buyer will have when you come to sell on. There is a saying that goes something like this - the secret to selling anything is buying it right in the first place.
Suggest you walk away and find something that is right.
Good luck.

Claire Smith

17:36 PM, 10th August 2016
About 2 years ago

Thank you for your advice. My friend will be disappointed, but it's better safe than sorry I guess The house itself is 20-30 years old and on a small estate where there don't seem to have been any problems with any of the houses, just a conservatory. Unfortunately that's the one that's for sale!

David Brewster

11:50 AM, 12th August 2016
About 2 years ago

Established practice is that the "holding" insurer will carry on insuring the property with a change of interest form but the insured will have no control over the premium payable.

Wyn Burgess

9:21 AM, 13th August 2016
About 2 years ago

I would not give up, more research needed, houses should have foundations recognising the poor ground at time of construction, for example they may be on piles. Subsequent poor construction of the conservatory would not have been subject to LA Building Control requiring subsequent remedial work. See if you can obtain competitive quotes to insure the property with this information and adjust your offer accordingly.

Claire Smith

12:04 PM, 13th August 2016
About 2 years ago

Reply to the comment left by "David Brewster" at "12/08/2016 - 11:50":

Thank you.

Nick Pope

14:24 PM, 13th August 2016
About 2 years ago

I think that some people are over-reacting in this case. No-on can guarantee that any property will have no problems in the future and it is those which have been underpinned will have been assessed in much more detail than any others and consequently there is lower risk of future settlement rather than higher.

You mention that the conservatory has been replaced and underpinned. This seems a bit odd. If the conservatory had subsided to the point that it had to be replaced, then underpinning would not have been done as this is used only for existing structures which can be saved.

Problems with settling conservatories are almost always because the builder has cut corners and the foundations are inadequate. In this case if the conservatory was replaced then I believe "underpinning" simply refers to providing proper foundations

As to insurance the existing insurer is under at least a moral duty to provide cover if they paid out for the replacement - if there is any risk then they or their loss adjustor have not done their job properly. The difficulty in getting quotes appears to be due to the information being provided to brokers is essentially incorrect - it's not the house which has settled but an addition. Direct contact with insurers providing all the information should elicit better responses.

As the house is comparatively new the Building Control Dept at the time would have required proper foundations, having regard to all factors such as ground conditions, water table, trees etc.

You say that your friend has found out that the house was "built on a farm or small landfill site." The vagueness of this suggests that this information was found in an Environmental report which was probably purchased on the advice of the solicitors. These reports are close to worthless as the information is gathered from out-of-date sources or websites providing generalised information. A client of mine panicked and nearly stopped buying a house because, according to the search, there was a "radiation source" within 200 metres. I was able to inform her that it was emanating from an X-ray machine at a local dental surgery.

Finally I advise that your friend talks to the surveyor who did the HBR report direct to take his/her advice on risks and the effect on future saleability.

Finally I can, if I look really hard, find evidence of movement in ANY property, even brand new. The trick is to assess the risk and advise accordingly.

Claire Smith

14:31 PM, 13th August 2016
About 2 years ago

Reply to the comment left by "Nick Pope" at "13/08/2016 - 14:24":

Thank you, I shall pass on this advice. Your comment about the conservatory foundations makes sense.

Rob Crawford

18:12 PM, 18th August 2016
About 2 years ago

I agree with Nick. It is likely that the conservatory foundations were not suffice. So if your concerns are only related to the subsidence of the conservatory then they may be over stated. I am not sure why a conservatory would be underpinned, much better and cheaper to remove and rebuild/replace it on a new base with foundations that meet building regs for the type of ground. I have just replaced my own conservatory to discover a 350cm foundation and base, the foundation for the new conservatory has been increased to 1 meter as advised by building inspector due to heavy clay.


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