Buying a house with history of subsidence

Beef

My partner and I have been looking to upsize from our 2 up 2 down for months, but have only recently fallen in love with a 3 bed semi that ticked all the boxes. The vendor advised us at the first viewing that a 2 storey extension had recently been underpinned, but after seeing all the necessary paperwork and guarantees for the work, we were satisfied that the problem had been rectified. We kept looking and viewing other properties but we kept coming back to the same house.

After some haggling, they accepted our offer of 5% below asking price, and we have sold our house subject to contract. The basic survey was carried out last week and only briefly mentioned there had been previous settlement to the extension and that underpinning work had been completed in May 2005, with no evidence of further problems. The work had been carried out by the vendor's home insurance underwriters, namely Norwich Union. This did not affect our mortgage in anyway, we received our mortgage offer from the Abbey and are proceeding with the purchase.

Even though none of the documentation uses the term 'subsidence', settlement and underpinning go hand in hand so I phoned Abbey's Home Insurance to inform them in order to prevent any problems further down the line. After confirming with their underwriters (CGU) they declined home insurance based on the underpinning work being carried out as recently as May 2005. They advised this was standard procedure with all insurers, and that the vendor's insurers are obliged to transfer the policy to the buyer. I am currently waiting to hear back from the vendors insurance broker to ensure this is the case before I go any further.

Some facts about the underpinning work:
Settlement of a 2 storey extension causing cracking due to insufficient foundations.
Underpinning consisted of an 'internal piled raft'.
Work carried out by Van-Elle Holdings (members of the Federation of Piling Specialists, ASUC Plus, the British Drilling Association, the CITB and the NHBC)
Work completed May 2005

I have copies of:
ASUC Indemnity insurance policy/guarantee untill 2017 to the sum of £13k
Completion certificate from local planning dept.

I have spoken to Abbey Insurance again and they confirmed the underwriters would require a trouble free period of 5 years for full underpinning and 10 years for partial before offering insurance, and there would be no effect on premium or excess. I plan on living at the house for the very minimum of 10 years, so insurance is less of an issue, and provided the existing policy can be transferred to me, I'll be quite happy until then.

Like I said, we are set on the house, and knew of the underpinning from the outset so we are still going ahead with the purchase. However future resale is obviously an issue and I would be grateful for any info and advice that would put my mind at rest, or even make me walk away.

The other thing I'd like to know is will the house always have this history, or is there a period of time, say 15 years with no evidence of further problems when you would not have to declare the work?

Thanks in advance for any help or advice

Beef

Quick update...

Norwich Union WILL insure the house with no penalties on premium or excess, and their quote for Buildings and Contents is cheaper than the equivalent with Abbey

goldbyron

Good one - well done!

It is ridiculous - subsidence is so common in this country and insurers refusing to cover leaves people in an impossible position. Glad you are all sorted.

payless

I assume you know CGU is NU anyway !!

Beef

payless wrote:

I assume you know CGU is NU anyway !!

No I didn't lol. Cheers for that

Doozergirl

As it says, the underpinning was required because of insufficient foundations, so the underpinning will do it's job entirely. Believe me, you now have more than sufficient foundations!

You shouldn't experience any further problems; if you did, it would be due to something else and there's as much chance of that happening on your house as anyone elses.

Go on, be happy!

courtjester

Point of order - settlement and subsidence are not the same thing.

Settlement is what buildings do ONTO their foundations as all the building materials bed in and the weight is taken up - often resulting in cosmetic non-structural fine cracks in new-builds which eventually can be filled and forgotten.

Subsidence is what the ground does UNDER the foundations - taking the foundations and the building with it.

Settlement is NOT covered by insurance. Subsidence IS covered and defined as "subsidence of the foundations...."

In general, if you are purchasing a property with a subsidence history, the best (and possibly only) insurers will be those who dealt with the claim originally, namely the existing insurers of the vendor.

There is a body of opinion that considers that for properties which have had subsidence repairs done professionally and correctly, they are likely to be a better future risk than properties that haven't in the same street. There is still a lot of misinformation and ignorance about subsidence, much of which is due to the poor technical management of subsidence claims when the cover first came into being in the 70's which resulted in a lot of properties being incorrectly repaired by insurers (badly designed underpinning schemes) which in turn resulted in further movement - this lead to the belief that properties with subsidence were 'blighted' because insurers were being approached over and over for secondary claims.

But ironically, this was often due to the incorrect use of underpinning and inadequate knowledge of the effects and interaction of soil conditions, presence of and management of trees and underground services.

The science of, knowledge and remedial actions for subsidence have moved on and improved hugely over the past 10-15 years and well-documented underpinning /repairs in recent times are likely to be more successful in stabilising buildings permanently.

Doozergirl

courtjester wrote:

Settlement is what buildings do ONTO their foundations as all the building materials bed in and the weight is taken up - often resulting in cosmetic non-structural fine cracks in new-builds which eventually can be filled and forgotten.

Subsidence is what the ground does UNDER the foundations - taking the foundations and the building with it.

Nice terminology I'll be stealing that, for future reference!

Beef

In this case it is localised to the 12 year old extension and not the 1987 built house. This suggests to me it was poor building technique rather than the usual causes associated with subsidence such as soil dehydration, trees and here in South Wales, past noodle mine workings