mortgage on underpinned property

cycloneuk

Will most lenders have no problems providing survey is ok and property can be insured?

bluedrop

when was it underpinned?

If itz more than 15yrs ago, I think L&G will insure at normal prices.

or else you have to go for specialist insurance firms - it can double or even triple your home insurance costs.

Make sure they have all the paperwork to support the work done.

I am not sure about mortgage though.

kingstreet

Not normally a major lending issue.

Surveyor may flag it and ask for evidence of what was done to justify valuation. Worst case scenario, he thinks future re-sale may be affected and suggests a lower maximum loan to value.

Insurability is the big issue. If you can get it covered for subsidence, heave and landslip with the usual £1,000 excess, you should be able to mortgage it.

Sponge

M&S ask if there's been any subsidence, heave & landslip within the last 10 years. (Which is underwritten and administered by AXA Insurance UK plc)

I've also heard L&G are 15 years.

I've also heard LV are similarly generous.

So you can legitimately answer 'No' if it was done that long ago.

dacouch

Sponge wrote: »

M&S ask if there's been any subsidence, heave & landslip within the last 10 years. (Which is underwritten and administered by AXA Insurance UK plc)

I've also heard L&G are 15 years.

I've also heard LV are similarly generous.

So you can legitimately answer 'No' if it was done that long ago.

I remember Saga and the then Fortis asking a very similar question some years ago.

A lot of my customers who had subsidence and had been renewing with the Insurer who paid out for the underpinning were tempted away against my advice.

I had most of them ringing me desperate for cover asap when they were on the verge of completing sales as their buyer had tried to transfer their policy to their name and the Insurers had refused.

The Insurers had realised they had taken on a lot of underpinned properties and had received some hefty further subsidence claims and decided to withdraw. They discover the clients who had previous underpinning then the house completion is about to happen and use this as a way of getting rid of the business.

The ex clients expected the original Insurer to offer cover but they always laugh and say they were prepared to continue offering cover forever but as the client had not repaid with loyalty they were not interested in offering cover (Insurers don't like underpinned properties).

The only options open were the specialised Insurers, who will normally want to perform a survey and then calculate a premium based on this. This can take a few weeks and the premiums are high so it throws a massive spanner in the works.

Something to think about, Axa and L&G have only just started offering cover, they may or may not stay in the market but you need to take it into account

dacouch

Just to add to this thread, Axa started offering Pet Insurance a few years back and have just announced (With no notice) they will no longer accept new customers for Pet Insurance.

I assume they're not making a profit on this class of business.

If in the future they're not making money on the underpinned properties they've (Fairly recently started) taking on they may do the same and stop offering cover. This would mean the buyer of your house who would typically Insure with the same company you did would not be able to take out cover with Axa. The chances of the original Insurer who paid out the subsidence claim are virtually nil so it could cause problems.

It should be noted that a couple of Pet Insurers withdrew from the market last year and the Ombudsman ruled they had to keep offering cover to their existing clients as they had "Lifetime" Pet Cover. A Home Insurance policy is more of an annual contract so there's a chance they may simply decline to offer renewal of existing policyholders cover at renewal .

Axa have not announced they are withdrawing from the underpinned market so no need to worry but if you go down the route of one of the companies such as Axa and L&G who've recently started accepting underpinned properties. You should have your eyes open to the potential problems if they decide to withdraw from the market