Finding out about subsidence

kilby_007

Hi,

We have today had an offer accepted on a house after a bit of back and forth over the last week. When the offer was accepted I was told the vendors have said that this is the lowest they will go and if the survey picks anything up then they would not drop the price. I thought this was a funny thing to say so I asked the Estate Agent to elaborate and she said that there was problems with subsidence on another property down the street and the vendors were worried about it. We're going back in the morning for a more detailed look

Anyway, I've just tried to do a home insurance quote with AXA and the website said "we cannot insure this property based on the information you provided". Direct Line came back with a quote of £1800 which is phenomenal given that we currently pay £200 in the same area. We've never had any claims previously and it was just a bare bones buildings insurance quote with no fancy extras.

I've tried a comparison site and I get a bunch of insurers I've never heard of quoting £160 - £250 but the better known companies (e.g. Churchill, Nationwide) come in around the £1000 mark.

Do these better established companies hold information on file that would bump up the premium (i.e. previous claims or issues) and if so would they divulge this information to me if I phoned? We've just been through all this with another house that had subsidence and ended up backing out, but the vendors of that property were good enough to tell us before the survey.

LisaLou1982

First off, id clarify whether the property has previously had or currently has an issue with subsidence.

Just because a house down the road has had a problem it doesnt mean that this property will. Unless they have very specific details as to what caused that issue then i wouldnt worry at this stage.

Start by asking who the property is currently insured with and what the premiums are. This should give you a good starting point.

kilby_007

LisaLou1982 wrote: »

First off, id clarify whether the property has previously had or currently has an issue with subsidence.

Just because a house down the road has had a problem it doesnt mean that this property will. Unless they have very specific details as to what caused that issue then i wouldnt worry at this stage.

Start by asking who the property is currently insured with and what the premiums are. This should give you a good starting point.

I will be doing that tomorrow, but I was wondering if anyone's got any thoughts on why I'm getting the huge insurance quotes and whether companies hold info on file that would cause a high quote. As a test, I've just tried changing the address to next door and all of the premiums drop to £200 - £300 so I think this must be the case.

kinger101

The insurance companies do hold detailed information on subsidence risk. Direct Line want the words "historic, longstanding and non-progressive" to describe any building movement.

To be honest, if a vendor told me a price could not be renegotiated after a survey, I'd withdraw my offer. But if you are buying a property at risk from subsidence, sometimes you can take over the vendors policy.

kilby_007

Just done another quote for the other next door neighbour on the other side and that is sky high too. This seems to correlate with the flood risk map and the fact the bottom of the gardens of this property and the one we're trying to buy is in the "high risk" zone being next to a drainage ditch. If that's all it is, I'm not worried because the house is raised up about a metre from the flood risk area and I don't think the house has been flooded previously but it will be a question for tomorrow, for sure.

kilby_007

kinger101 wrote: »

The insurance companies do hold detailed information on subsidence risk. Direct Line want the words "historic, longstanding and non-progressive" to describe any building movement.

To be honest, if a vendor told me a price could not be renegotiated after a survey, I'd withdraw my offer. But if you are buying a property at risk from subsidence, sometimes you can take over the vendors policy.

Thanks, what would be the reason you would withdraw your offer? Because it would concern you, or just out of principle?

lincroft1710

If you stay in the house for 5 years you could be paying an extra £4,000 in insurance premiums. So you should consider this in relation to your offer.

Ithaca

kinger101 wrote: »

To be honest, if a vendor told me a price could not be renegotiated after a survey, I'd withdraw my offer.

When we sold our house we gave our buyers a similar ultimatum, although not quite as final.

Our buyers' mortgage valuation survey came in £4k below the accepted asking price offer which we disagreed with (as did both estate agents) but we didn't feel like we'd be able to successfully challenge. So we said that any defects found during subsequent surveys, up to a value of £4k, should be accepted by the buyers (as they'd agreed an asking price offer initially).

So when the homebuyers' survey recommended £1500-£2000 of work (nothing too drastic, bit of damp in the kitchen and some re-pointing on an external wall) we kept the price the same.

But we'd have been prepared to reconsider if anything more significant had been found, although in reality it probably would have been us pulling out of the sale first as we couldn't afford to drop any further and still buy the place we wanted.

kilby_007

Ithaca wrote: »

When we sold our house we gave our buyers a similar ultimatum, although not quite as final.

Our buyers' mortgage valuation survey came in £4k below the accepted asking price offer which we disagreed with (as did both estate agents) but we didn't feel like we'd be able to successfully challenge. So we said that any defects found during subsequent surveys, up to a value of £4k, should be accepted by the buyers (as they'd agreed an asking price offer initially).

So when the homebuyers' survey recommended £1500-£2000 of work (nothing too drastic, bit of damp in the kitchen and some re-pointing on an external wall) we kept the price the same.

But we'd have been prepared to reconsider if anything more significant had been found, although in reality it probably would have been us pulling out of the sale first as we couldn't afford to drop any further and still buy the place we wanted.

That's a fair negotiation in my opinion. It may be a similar scenario with us, that the seller genuinely thinks the offer is at the low end of what they were willing to accept and that we might gazunder them (I would never do that unless it was something serious but I'd be more likely to back out in that case anyway). It's just the way in which the EA explained it and started talking about the other property which needed underpinning. If there is an issue that both know about, then I'm glad that the EA has given me some clues, but if it's not the case and there's no issues then she's a pretty poor estate agent IMO, we could have walked away from it there and then.

kinger101

kilby_007 wrote: »

Thanks, what would be the reason you would withdraw your offer? Because it would concern you, or just out of principle?

Both. Because my offer would be based on no nasty surprises, and I'd think there was something wrong with the place (surveyors are often useless and might miss it anyway). If you are interested in proceeding, don't spend any money on a survey before you're seen the property information form (TA6).

kinger101

Ithaca wrote: »

But we'd have been prepared to reconsider if anything more significant had been found

Not much point in giving the ultimatum then.