Buying a property with structural movement

rawprouk

Hi everyone,

We're just about to exchange on a 1900s semi-detached 4-bed house in Ealing (west London).
Our building survey came back with a few concerns about cracking to the front of the property, so we paid for a structural survey. This came back with concerns about a supporting beam in the loft having moved an inch or so and further cracks found along the same vertical line (inside and out).

We instructed a CCTV drain scan which revealed that the main drain run was in poor condition and seeping into the soil at the joints. There's also a mature cherry tree in the front garden, very close to the house.

Everything points to most likely a combination of the tree and drains as contributory factors to subsidence/movement on the left hand side of the property. Cracking has reoccured since the house was redecorated inside and out in 2011, so is currently progressive.

Obviously there's a fair bit of work to do: digging out and replacing 12m of drains, cropping the tree, repairing the cracks, fitting a steel beam in the loft to support the structure etc. - probably amounting to £20k+

That leaves us with a very difficult decision to make - it's the perfect house on the right road in a good location. Houses here rarely come up for sale (last one was over 6 years ago), so unfortunately it's not as easy as just choosing another.

Now the dreaded words 'progressive' and 'movement' have been mentioned by the surveyor and engineer, I'm guessing it'll be an insurance nightmare - and whether the mortgage lender will still be willing to offer given the reports (though their valuation survey raised no concerns whatsoever - even though the cracking is unmissable on the front of the house). There's also the possibility of finding it harder to sell later on down the line.

Everything tells us to walk on, but we really want the house and are willing to spend time fixing these issues as we plan to live there for 10-15 years +. The house has stood for 115 years, it's not going to fall down any time soon, but not knowing the true extent of what needs to be done (i.e. if underpinning will be required at a later date) it certainly is a large risk.

Wondered if any of you had any experience in a similar situation or advice? Is it worth taking on even with a large price reduction? With the current demand levels in London, someone will undoubtably buy this house - it would be frustrating for it not to be us!

Thanks in advance
R

SG27

If you are happy to do the work and the price is right then I can't see why not?

Doozergirl

If you have a clear plan of action and can obtain quotes for the work then it isn't the end of the world.

All things can be rectified. It just depends on whether you want to take it on and can afford to. Having a clear mortgage valuation is interesting. They will not lend if you tell them - you'll end up with a heavy retention at best.

We've done it a few times in the past and I've always been happy to take the reduction in value and then 'profit' once we've done the work. It's mainly dependent on having the money to do that without a mortgage (it should really have been highlighted by that valuation!).

AdrianC

If it costs £20k to do the work, and you get it for £20k less, then everybody's evens, right?

Sure, there's a historic stain on the place, which may well bite you on resale, but you're not planning on moving soon, so is that a big factor? After all, in 15yrs, you'll be able to point to the lack of movement since the work was done, etc etc.

Get quotes from three specialists, and hit the vendor with them. Make it clear to them that all bets are off unless you can come to a satisfactory reduction.

BUT... you've got to decide at what point you REALLY are prepared to walk. Let's say your quotes come in at £20k, but the vendor only wants to go to £15k reduction. Or £10k. Or £5k. Or says "Nope, houses like these only come up rarely, y'know, and there's a queue behind you.". What then?

rawprouk

Thanks everyone - good advice there.

The property is around the £750k mark, so even £50k underpinning is not a huge percentage of the value.

As I see it, there's a few options here:

1. We're upfront with the movement issues - get the current owners to make a claim on their insurance to fix everything. Transfer the policy to us and continue with exchange/completion. Propose a small price reduction to cover the inconvenience and possible issues with resale.

2. Ask for a large reduction - say £50k - get all of the work done when we move in, don't mention anything to the lender or insurance company and hope it doesn't get any worse. If it does, risk the fact that the insurers might not pay out and we'd need to fund repairs ourselves.

3. Walk away and keep looking


Couple of questions:

- Currently our solicitor doesn't know about the survey results - maybe we keep it that way, as am I right in thinking they have a duty to tell the lender?

- If we do negotiate a discount, is there a way of doing it without telling the lender - i.e. get them to forward the full amount and ask the vendor to refund the agreed reduction?

So confusing..

xMonsoonx

Walk away.

Getting building insurance or a mortgage agreed will an absolute nightmare as the property is not structurally stable, not to mention the difficulty of reselling one day!

Annie1960

rawprouk wrote: »

- If we do negotiate a discount, is there a way of doing it without telling the lender - i.e. get them to forward the full amount and ask the vendor to refund the agreed reduction?

So confusing..

Not confusing at all. You cannot lie to your mortgage company about how much you are paying. You cannot ask the vendor to refund any 'agreed reduction'. How would this be enforceable if the vendor, after completion, said 'what reduction'?

Hoploz

I'd say it's going to be difficult to arrange a discount without the solicitor knowing - you are right, they will be duty bound to tell the lender once they know as they will probably be working on their behalf too.

It's a tricky one. You might find insurance awkward in future even if the work is done.

Would it even be covered by the current owner's insurance as you are suggesting? If it were that simple surely everyone would get their houses fixed up for free. I have a feeling if they approached their insurance co they would say it isn't covered, eg you should have informed us immediately a tiny crack appeared, you're not covered for this type of problem, etc etc.

I don't know what I'd do in your position. I totally get the thing about wanting the house regardless - its one of the reasons we didn't have a survey on our (expensive) house - we knew NOTHING would stop us buying it anyway!

Owain_Moneysaver

You say 'engineer' so I hope your structural survey was carried out by a MIStructE Structural Engineer not a general property surveyor.

£20k is less than the cost of a nice fitted kitchen and if the house is £400k, (quick guesstimate from a property website for semis in Ealing) only 5% of its value.

A lot of buyers will be put off by the work required and the financial risk.

If you can cope with the disruption and have the financial resilience to manage the risk you could be onto a very good thing with this house.

Sounds like a week's work with a digger and lots of concrete.

And it would be better to negotiate a significant reduction on the value of the property, then pay to have the repairs carried out yourself after buying. That way you are in control and have the benefit of all the guarantees etc.

Damage arising from lack of maintenance, trees and drains is not necessarily going to be covered by insurance anyway, or there may be a significant amount of 'betterment' in any payout.

rawprouk

Thanks everyone - really helpful advice.
I think we're going to pass on this one!

trev22

Guys is there a definate deadline/ number of years that you must keep getting the specialist house insurnace due to historical subsidance
?

work done, some yeras back and no more issues, so can we go back to normal insurance quote now (cheaper)

Thanks

T