Subsidence stopping us getting a mortgage

AmandaHH

Hi
We have put an offer in on a house but it has failed the survey on subsidence in the detached garage. The house is sound.
It is being repaired by the sellers insurance company.

Our building society won’t give us a mortgage now on the property and we need to find an insurance company that will insure it after it has been fixed with no exclusions.

I seem to be coming against a brick wall.

Can anyone help?

Thank you 🙏🏽

AdrianC

The lender don't want to lend on this, in its current state, because they don't know whether the problems will end up being fixed or not.

Just pause and think why they're being cagey. Then wonder about whether you aren't being cagey enough.

There are other houses. Lots of other houses.

The seller can sell this one to somebody else once it's demonstrably fixed.

foxy-stoat

I would look at another house, no one will buy this property unless it is stinking cheap and doubt the seller will sell for less than standard market value. It will be drama to sell on even after a few years following the repair.

SmashedAvacado

We are talking about a garage here not the whole house.
I would pause before walking away - presumably fixing or even rebuilding the garage is an option for the seller if they want this deal to go through. Your lender is factoring in the value of the garage in the overall security package on offer. You could get a value for the house without the garage and put this in front of your lender (if you have reasonable levels of equity)

JonMitchell

It is not the garage that is only the risk factor for mortgage lender, it is usually the perimeter around it, X meters square that surveyor will take into consideration.

I would earnestly suggest to you that you drop this sales and move on, 2 immediate implications:

a.) Insurance - even if you are able to secure a mortgage for this house that you fell in love with, the yearly insurance from here is going to be exponentially high. UNLIKELY any retail insurance company will cover your property and you will be left to use the existing one, which is from your vendor. This opens up a big avenue for them to charge you ££ that is sometime beyond imagination! A friend of mine was charge around £6K for a yearly insurance after subsidence happened.

b.) Value of property - if it comes a point where you sell your property, buyers will be hit WITH THE SAME ISSUE you are facing now. Properties tend to have 20% minimum knocked off their market value when subsidence happen.

Skip this if you can at all possible, to avoid imminent nightmare to come

lewis_hardwick

Pull down the garage? No garage, no subsidence! :beer:

foxy-stoat

I have had issues with a house I was looking at with the lender for a house 2 doors away that had subsidence. Dont assume that its just a garage house is a-ok.

cattie

Be thankful you can't get a mortgage on the house & find somewhere else to buy. I speak from personal experience having once bought a house that had had remedial work carried out by insurance company & when I came to sell the house some years later I had to take a hit on the price to get a sale. I was lucky in that I was downsizing, otherwise I probably wouldn't have been able to afford to accept a much lower price.

I'd been a cash buyer not needing a mortgage, but had I known that the house wouldn't sell as easily as I'd hoped, I'd never have bought it in the first place. It becomes an albatros around your neck, no matter how lovely you've made the interior.

akira181

If the garage has subsidence, then there's potentially issues with the land in the surrounding area that may or may not eventually affect the house.

Even if it doesn't, when it comes to house insurance or selling the house in the future, when they ask if the property has every suffered from or had work done for subsidence, you'll need to say yes regardless. They won't care if it's detached garage or a boundary wall. It'll affect your premiums and make the house difficult to sell later.

Sometimes it's better to walk away even if you've fallen in love with the place unless you're prepared for a bunch of hassle down the road. Plenty more fish in the sea