Selling house - historic subsidence

skm1981

I've posted a few times about this, but just really need some advice.  

Our buyer's home buyer survey said possible subsidence.  Their mortgage lender said they would not lend unless a structural survey was done.  We had a structural engineer round and his report has come back with the dreaded word 'subsidence', although historic subsidence.  The report says that our house has suffered from historic subsidence which is likely to have been caused by "consolidation of fill material locally under the foundations" but that he sees no evidence to suggest this movement is ongoing.  It says that whilst there is a small chance of this reoccurring, it's unlikely.  It says that the ground our house is built on is not susceptible to subsidence and capable of taking large bearing pressures.  

The report finishes by saying that this could be investigated by digging trial holes in the foundations and the soil below and to monitor cracks, but on the balance of evidence, he thinks that if the cracks are repaired and stitched with helibars, it is likely that no further problems will occur.

I'm now convinced our buyers will pull out.  Has anyone had this issue before and managed to sell ok and did it excessively up the insurance premium?  I'm not really sure what I need to do if our buyers pull out.  I'm assuming I now need to inform my insurance company?

skm1981

Thanks for your response.  I'm going to wait to see if my buyers now pull out, which I assume they will but they may not, but I'm just wondering, the structural engineer has recommended the crack be stitched with helibars, which I have no idea about cost on.  So I'm guessing I'll need to now inform my insurance company about the historic subsidence, but would I be best off getting the repairs done using my insurance company or to look to get this done myself?  I think the subsidence excess of my insurance is about £1,250.

flbuyer

I wonder how the buyer could take a view on the purchase if the scope of the subsidence issue, work required and likely cost is not yet fully understood. You could consider getting as much information as possible about it and providing to the buyer to reduce uncertainty and then letting them decide. Perhaps speak with your solicitor about the best approach with the insurance company.

skm1981

I don't have a solicitor, she's a conveyancer and pretty useless I'd say so far, which really isn't ideal.  When this whole issue arose in the buyer's homebuyer survey, my conveyancer's response was to see if I could open the lines of communication with the buyer myself by getting their contact details from my estate agent.  I didn't feel comfortable with this because the buyer may not want to be dealing with me direct, plus I thought that was the whole point of having some form of legal representation.  So my estate agent has been acting as the go-between for this, but yes, that's a good idea.  I think I'll see what the buyer says and then if they're still keen to proceed (given that they've probably spent near £1,000 in surveys and that they've been keen enough to stick around so far, it could be a slight possibility), and maybe offering to get the brick work stitched as the structural engineer says or reducing the asking price slightly.  

I'm just wondering if they'll withdraw their offer because of the potential insurance cost and whether her mortgage provider is still happy to lend.

Tiglet2

skm1981 said:

 The report says that our house has suffered from historic subsidence which is likely to have been caused by "consolidation of fill material locally under the foundations" but that he sees no evidence to suggest this movement is ongoing.  It says that whilst there is a small chance of this reoccurring, it's unlikely.  It says that the ground our house is built on is not susceptible to subsidence and capable of taking large bearing pressures.  

The report finishes by saying that this could be investigated by digging trial holes in the foundations and the soil below and to monitor cracks, but on the balance of evidence, he thinks that if the cracks are repaired and stitched with helibars, it is likely that no further problems will occur.

It is possible that the buyers will pull out unless they take a view on the Structural Engineer's report and accept that the movement is historic and not progressive.  My inclination would be to repair the cracks and stitch in with helibars and then try and sell once again in a year or two.  Chances are with no further progression on the cracks, that the new buyer's survey will be fine.  

I would be very wary of informing your insurance company as, once they get wind of a possible subsidence problem, they will probably insist that trial holes are indeed dug and they would be monitored over a year to assess any further subsidence progression.  It would be doubtful that your buyers would be wiling to wait a year for the results of the investigation anyway.  Your insurance premiums will likely rise substantially and you would have to declare the work to any future buyer.

Bear in mind that many properties have historic movement.  My first house had some cracks which showed up on our buyer's survey as historic movement.  We lost our buyer but got the cracks repaired and sold two years later without any issues.  My current house also has a small amount of cracking to some brick work, noted as historic movement.  We've been here 10 years and the crack is no bigger than when we bought.  The house is over 70 years old so I don't think it is likely to fall down now.

steadfast123

I had a house which was part of a row of terraces that all had subsidence due to the land they were built on. My insurance was £65 a month. I made a claim when minor cracks appeared- they dug bore holes and did some monitoring. The upshot was that they repaired cosmetically and didn’t bother with the remedial work an independent engineer had recommended. In hindsight I wouldn’t have made the claim as it needed to be declared when I sold. 

Falafels

Why are you convinced your buyers will pull out? Have they said they're going to?

skm1981

Our house is pebbledashed and if we don't sell, we plan to have the entire house rendered anyway, so should be able to get the stitching done then. But yeah, this is the thing, I am really reluctant to let the insurance company know as I know that will forever create problems because subsidence will always be listed against the house. I just wonder if the sale falls through, is there any way that that structural survey will get back to the insurance company or just be noted somewhere that it raised historic subsidence.  I mean there are plenty of other houses nearby that seem to have identical cracks to ours, and I wonder if when they've sold, if the same issue has been raised.

If we go down the helibar route, when we came to sell again, would I need to declare that work?  

skm1981

Falafels said:

Why are you convinced your buyers will pull out? Have they said they're going to?

No, they've not said, I'm just basically assuming the worst, that they'll see historic subsidence and decide not to carry on with the purchase.  And also, they're first time buyers, so wondering if their mortgage company will refuse to loan against the house.

Falafels

skm1981 said:

Falafels said:

Why are you convinced your buyers will pull out? Have they said they're going to?

No, they've not said, I'm just basically assuming the worst, that they'll see historic subsidence and decide not to carry on with the purchase.  And also, they're first time buyers, so wondering if their mortgage company will refuse to loan against the house.

When I bought my house, the surveyor's report recommended a retention on the mortgage for remedial works to fix roof spread. I was single at the time, had a very demanding job and didn't feel up to all the hassle. I withdrew from the purchase, but my vendors offered to do the works and it was all sorted.

Don't assume that your buyers will pull out. They may well not do. Wait and see what their lender says in light of the report. 

skm1981

Falafels said:

skm1981 said:

Falafels said:

Why are you convinced your buyers will pull out? Have they said they're going to?

No, they've not said, I'm just basically assuming the worst, that they'll see historic subsidence and decide not to carry on with the purchase.  And also, they're first time buyers, so wondering if their mortgage company will refuse to loan against the house.

When I bought my house, the surveyor's report recommended a retention on the mortgage for remedial works to fix roof spread. I was single at the time, had a very demanding job and didn't feel up to all the hassle. I withdrew from the purchase, but my vendors offered to do the works and it was all sorted.

Don't assume that your buyers will pull out. They may well not do. Wait and see what their lender says in light of the report. 

Thanks, I'm keeping everything crossed!