Historical subsidence uncovered and getting insurance

LouiseK_2

Not Peer Reviewed

We are in the process of buying a 1920s detached house. The (full structural) survey has come back and suggested that one side of the house has suffered slight subsidence. I have spoken to the surveyor who tells me that his gut feeling is that the problem is historic (the house is 90 years old) and recommends that we get the drains checked which run alongside the particular wall in question since this could be the cause. I don’t feel particularly worried that there is an issue but we are going ahead with a specialist drains survey and we are going to get a structural engineer to take a look.

However, I am concerned about obtaining buildings insurance.

The vendor says he is unaware of any movement and so this “problem” has not been declared to his insurer. However, since we know about the “problem”, we would have to declare it (otherwise presumably we are committing fraud since the surveyor explicitly mentions subsidence). How difficult would it be to get insurance and how much extra premium are we talking about?

Also should we be re-negotiating the house-price downwards to reflect this “problem” and by how much (we are paying £460,000)?

Any advice/thoughts/experiences greatly appreciated.

BTW the surveyor valued the house at £460,000 for mortgage purposes and, although highlighted to the Bank that there had been movement, we have still been offered the mortgage so obviously they are unconcerned.

bryanb

Do you live in a mining area? Or any kind of tunneling? London underground?

LouiseK_2

No history of mining in the area or LU.

I don't think subsidence is not uncommon in the general area
(another house we offered on but didn't get had previously been underpinned, etc.) since we're on clay, etc.

There is a mainline railway station nearby and I know that during the war the area was heavily bombed because of this. Presumably vibrations, etc. may have weakened the drain pipe, caused leaks, etc. and hence some movement...which is why the surveyor indicated it was drain-related if anything (no trees in the vicinity).

bryanb

I'd guess that insurance won't be too much problem in that case. I'd emphasise the historical/ drains part when applying.

Eric1

LouiseK wrote: »

However, I am concerned about obtaining buildings insurance.

I'd be too. If you search this forum for subsidence + insurance, there are quite a few horror stories about the S-word.

an example
https://forums.moneysavingexpert.com/discussion/786845

chou-chou

You may need to go with a specialist insurer and it will be a bit more expensive. I think we pay around £40 per month for buildings only (with Towergate Strovers) for a house which had a subsidence problem that was rectified about 10 years ago. We negotiated an extra £2500 off the asking price which we felt would cover the additional insurance premiums over the next 5 years.

An alternative would be to see if the vendor's current insurer would be prepared to continue cover and transfer it into your name.

There are lots of horror stories about subsidence around but also lots of people who won't be put off buying somewhere which has had problems in the past. As long as you get good, professional advice and are comfortable this is not an ongoing issue I wouldn't worry too much.

LouiseK_2

I thought it might be useful to give an update on the situation, just in case anyone else has a similar situation.

Well, we spoke to our surveyor (again!) who confirmed that the house was fine, but since he noted the "problem", he had to report it. Our seller is going ahead with a drain survey and confirmed that the drain had previously been blocked and re-lined (our surveyor said that this was most likely the source of any movement) and this was an insurance claim about 4 years ago. The seller is going to provide our solicitor with details of this claim, etc.

The next step is then for our vendor to notify his insurer of our surveyor's findings - our surveyor said that he would expect the insurer to take a pragmatic view since the house is no more of a risk than before the survey (especially since the original drainage probem was an insurance claim and no further "repairs" are necessary) and so should not charge an additional premium for future insurance, etc. This insurance will then be transferred to us on exchange. Otherwise, we would have to go to the open market and have to declare the movement and most likely pay through the nose for insurance.

This does restrict us to using the current insurers for future insurance (so can't really compare the market on renewal money-saving style), but it means to some extent we should pay "normal" premiums.

Finger's crossed, it all goes ahead as described!

Orpheo

I bought a house with a history of subsidence in a coal mining area. The coal authority did all the necessary remedial work and there was no recurrence. I was able to insure it when I bought it, but once I insured it I was unable to switch insurers at all and my premiums kept increasing unreasonably year-on-year. One insurance clerk I had a conversation with when trying to switch told me, (I think he pitied my desperation), that the vast majority of insurers have an agreement whereby they do not accept customers switching insurance when subsidence is involved. Many insurers just won't touch subsidence period. I know there are some specialist insurers, Hiscox for one, that do insure properties with subsidence, but they will require lots of paperwork and evidence and I suspect the premiums will reflect the higher risk. Thankfully, I was able to sell the house, but I will not touch a house with the words subsidence (or flood) ever again in the future.