URGENT: Getting a mortgage on a property with subsidence

frosty79

Hi,

I'm looking to purchase a beautiful period property, however it has suffered from subsidence and requires underpinning (according to vendor's survey). I'm having trouble finding a lender who will provide a mortgage on the property prior to it being underpinned.

If anyone knows has encountered similar problems and/or know of any lenders who would provide a mortgage on such a property I would love to hear from you.

Many thanks!

Milliewilly

No mainstream lender will touch it.

Richard_Webster

Has seller made an insurance claim? Are insurers prepared to deal with it? Are they prepared for the benefit of the claim to be assigned to OP? If not then foolish to buy even as a cash buyer except at an exceedingly low price.

Why walk into a problem? Let seller sort it all out.

Charterhouse

You do realise how much underpinning could cost, right?

Milliewilly

I wouldn't buy it unless it was soooo soooo cheap you could be confident if the market collapses further you could still shift it on as is at a profit. A builder would probably buy it then anyway.

lincroft1710

Subsidence can mean part or all of the property needs underpinning. I have known properties with subsidence sell for a third of the one next door which had no subsidence issues.

Did the vendor have a proper report by structural engineer or just an ordinary survey? You should have the former done before even thinking about purchasing.

frosty79

Thanks for the responses. To briefly answer your questions:

The previous owner has successfully claimed on their insurance for the subsidence and, as such, the property is available at a considerable discount (c. 30%).

The previous owner has unfortunately deceased as such the property is being sold by the estate, hence not willing to carry out the underpinning themselves.

Yes, am aware of the cost of underpinning, I have received quotes for carrying out the underpinning, in the region of £25-30k. Even after this there is a considerable discount to market value (c. 25%)

Am currently attempting to obtain detailed engineer's report from insurance company, which I presume would have been carried out given that the insurance company has paid out on the property.

Can understand why most lenders would be reluctant not to provide a mortgage on this, however am interested to hear if anyone has been able to overcome this hurdle and, if so, how and with whom.

Milliewilly

frosty79 wrote: »

Thanks for the responses. To briefly answer your questions:

The previous owner has successfully claimed on their insurance for the subsidence and, as such, the property is available at a considerable discount (c. 30%).

The previous owner has unfortunately deceased as such the property is being sold by the estate, hence not willing to carry out the underpinning themselves.

Yes, am aware of the cost of underpinning, I have received quotes for carrying out the underpinning, in the region of £25-30k. Even after this there is a considerable discount to market value (c. 25%)

Am currently attempting to obtain detailed engineer's report from insurance company, which I presume would have been carried out given that the insurance company has paid out on the property.

Can understand why most lenders would be reluctant not to provide a mortgage on this, however am interested to hear if anyone has been able to overcome this hurdle and, if so, how and with whom.

Massive deposit and a personal loan??

frosty79

Update:

I've now received the detailed report into the subsidence, which suggests that the subsidence is caused by "clay shrinkage following moisture extraction from nearby vegetation". The cause of the subsidence has been identified as the vegetation and as a result the offending vegetation has been removed.

I wonder whether this improves my chances of obtaining a mortgage?

Fire_Fox

The house still needs underpinning - if it is un-mortgageable it isn't worth what you have agreed to pay, it's worth what it would sell for at auction.

anselld

frosty79 wrote: »

The previous owner has successfully claimed on their insurance for the subsidence

If the previous owner has successfully claimed why dont they just get it fixed by their insurance. What have they claimed exactly and what are they doing with the proceeds of the claim if not fixing the problem?