House I'm purchasing has history of subsidence

ems1988

Hi there,
Wondering if anyone can help as solicitor doesn't seem keen to advise. 

I'm purchasing a house that has history of movement - once in 1996 and once in 2011. We have been provided with an insurance claim for repair works to cracks in 2011, which show movement arised after the removal of a large tree which changed moisture levels in the soil. The insurance claim also included a 'certificate of structural adequacy' which can potentially be transferred to us as the new owners. Note this did not require underpinning. 

The house is old (c. 1890) and is on a hill, and movement in the area is common. 

A structural engineer has been to look at the house and says for now there is no further cause for concern. 

Should we be worried? I have read that insurance can be hard to come by for properties with a history of subsidence. 

We have not exchanged, so it's not too late to change our minds or try to negotiate further on price.

Any advice gratefully received. 

akwexavante

Try to insure it!  Go online and pick a broker or go direct to an insurance company and fill out the online application form as if you were insuring the building.  If they won't insure it the process will fail and tell you why you failed.   Insurance companies tend to share info as part of a group of companies.  If you know who the previous company was, find out which other companies are within that same group of companies that share info and try a company that isn't within that group.

A friend had an outbuilding collapse due to subsidence, a claim was made to rebuild, premiums went up by a little under £40 a year and after 5 clear years it's no longer a problem any more.  You no longer have to declare that the property had past subsidence after 5 clear years.

[Deleted User]

akwexavante said:

  You no longer have to declare that the property had past subsidence after 5 clear years.

check the policy wording.   Some are 5 years,  some are 10 years, some are 25 years, some are forever

ConfusedSeller

I wouldn't be concerned. Get quotes for house insurance, check the excesses and if you're happy I'd go ahead. Subsidence is something which is cropping up more and more and will effect more properties (especially with how a lot of new builds are put up now!!) so if you love the house and your surveyor is satisfied, go for it

pickledonionspaceraider

I wouldn't touch that house

cattie

As someone who once owned a house with previous structual works  under an insurance claim, I'd run a mile. I bought the house after surveyor advised that house now seemed A1. Vendor was insured with same insurer I had buildings insurance with at the time & had no problem me continuing to insure said house with them.

The big problem came when I came to sell about 4yrs later. In spite of having the house fully refurbished I had to take a hit of £25k on the price due to the history of the house as I desperately didn't want to lose out on the property I was hoping to downsize into. Never again would I consider any property that had suffered structual issues unless it was at a really bargain price.

ems1988

We tried getting insurance and Churchill will cover it, provided the certificate of structural adequacy is transferred to us. Quote was for £380 per year, which is a fair bit less than the current owners are paying. 

So I don't feel like the subsidence is really an issue but I'm worried that we haven't negotiated on price to reflect that future prospective buyers might be put off. It sounds like opinions are divided - some people might run for the hills!

It's worth mentioning the house is an area where demand is incredibly high, a lot of houses don't even make it to market. Perhaps it won't be an issue to resale, guess we don't know.

jimmyhurr

We bought a semi detached 1920s house around 2006 that had had structural movement in the mid-90s. This had been repaired at that time under insurance and was fully backed with certs etc guaranteed for 25 years - underpinned on one half. There had been no movement since that time. At the time our mortgage was with Nationwide and they would only accept the mortgage if we insured through them - it wasn't particularly expensive cost and was tacked on to the monthly mortgage payment (we had an excess of £1K if i recall for any settlement related issues). When we purchased, we took a view that since the area was known for settlement issues due to the shallow foundations and the soil type, and the house had already suffered and been put back to right, we were in a better position than other houses in the street that had not (yet) suffered - we also really liked the house.

We lived happily in the house for 12 years and then sold it 2 years ago without issue. It was a very popular area and sold in 2 weeks. We were up front about the underpinning with every prospective purchaser and that did put some off but ultimately our buyers were unconcerned (their solicitor was more concerned about a cert for some electrical works!). I wanted to be up front so that the sale process did not go too far down the track before the underpinning came up.

I think that with a house that has has structural issues in the past, the main things to do are to have it surveyed properly to check whether there has been any recent movement, check it can be insured and also consider the re-sale of the property if you want to move on in the future: if the area is popular, then likelihood is you will find someone.
P.S Lastly, if you are the sort of person that worries and you don't want the hassle of dealing with a property that has had some structural issues, then I would pass and move on. 

BlueC

We bought a property that had relatively recent history of subsidence caused by a collapsed drain and repaired under a building insurance claim. Provided you're content that the issue is no longer present I think you've summed up the two problems for consideration: first is insuring it and the second is resale price or resell-ability.

Seems you have found a good quote from Churchill for insurance but I have found I need to go to specialist brokers and it costs me about 3x the price of a policy on a similar property with no history of subsidence. Also the excess is heavily loaded for any future subsidence claim and I also suspect that claiming would be very difficult.

The second problem is whether you can resell it or what the resale value will be. It won't put every buyer off, but it will put some off as demonstrated by the "I wouldn't touch that house" comment above, and therefore it reduces your pool of potential buyers and can also negatively affect the price.

Only you can decide whether to proceed. I would want a decent reduction, and in hindsight I don't think we got a big enough reduction in purchase price to reflect the two difficulties outlined above, especially the potential problem of resale. What I would say, is that owning a house with history of subsidence is a bit of an ongoing worry and probably something I'd think more carefully about in future.