Underpinned retaining wall & mortgage

FrankoBee

Hi, I’m looking for some advice on a property we’re in the process of buying at the moment. 

We’re quite far along and we’re hoping to have exchanged by now but along the way it’s come to light that a retaining wall around one side and rear of garden has been underpinned recently. The works say it was down to weather damage (I’ve looked into the t&c’s from the insurance company used and they have a strict criteria for this classification so Im confident it was looked into thoroughly) The house is absolutely fine (no subsidence or underpinning) but underpinning of the retaining wall was done to prevent any risk to property which sits on the land behind it.

Our solicitor is referring this info back to the lender now (still not been forwarded as waiting on various supporting documentation before it goes) but I’m wondering if this is something we should be concerned about in terms of our mortgage offer being withdrawn?

I can’t find much online about the issue and I was under the impression that the mortgage company are looking at the house not the garden walls? (fully aware these are very important garden walls!) The work has all been signed off by building regs so as far as we’re concerned the issue is fixed and safer than before.

Has anyone got any advice or similar situations they could share? We really love the house and just want to be in there ASAP! 

verytired11

I bought a house that had recently had its rear wall underpinned.  From memory the mortgage company wanted to see that the work had been completed satisfactorily and they made a condition about retaining the same insurers and ensuring we completed works required by the survey, but it all went through fine.  However, that was 20 years ago so I am not sure what the position would be now.

FrankoBee

Thank you for that! I’m glad it was a positive outcome for you. The insurance seems to be a bit blurred some insurers ask if the ‘house’ has been underpinned (no mention of garden or outbuildings etc) so it’s a no whereas others use the word ‘property’ which means it’s a yes.

I think I’ll phone the current insurer and ask if we could keep the policy and get confirmation to send to the lender. I have done some quotes declaring it as an outbuilding as I can’t select retaining wall and they weren’t anywhere near as frightening as i expected! 

Section62

FrankoBee said:

I can’t find much online about the issue and I was under the impression that the mortgage company are looking at the house not the garden walls? (fully aware these are very important garden walls!) The work has all been signed off by building regs so as far as we’re concerned the issue is fixed and safer than before.

The mortgage company will be looking at whether the property has sufficient value to cover the amount of money you are borrowing in the event you decide to stop paying the mortgage and hand the keys over to them. They will also want to know that in the event of that happening, they will be able to offload the property quickly and with minimal hassle. Anything which reduces value, or might complicate a future sale, is something a mortgage company would be wary of.

As (presumably) the retaining wall is the responsibility of this property, it has the potential to be problematic if a sale was required.

I'd also be cautious about a retaining wall which had been damaged by 'weather'. Frost and water would be the two most likely weather-related causes of damage to any kind of external wall. Drainage improvements would be the most likely cure for those problems.

I can't think of an obvious link between 'weather' and the need for underpinning - unless the wall was structurally defective in the first place and the 'weather' only exacerbated an existing problem.

FrankoBee said:

The insurance seems to be a bit blurred some insurers ask if the ‘house’ has been underpinned (no mention of garden or outbuildings etc) so it’s a no whereas others use the word ‘property’ which means it’s a yes.

I think I’ll phone the current insurer and ask if we could keep the policy and get confirmation to send to the lender. I have done some quotes declaring it as an outbuilding as I can’t select retaining wall and they weren’t anywhere near as frightening as i expected! 

You absolutely must make sure a prospective insurer is aware that this is a structural retaining wall and what has happened to it previously. Even if they only ask about the 'house', the existence of the wall and the history is an important material fact.

There is also no comparison between a retaining wall and an outbuilding. The risk profile is entirely different. Also beware of providing inaccurate information when obtaining quotes - if you make excessive changes to the details the quotation system might flag it as a suspected case of application fraud.

FrankoBee

Thanks for you reply it’s really helpful! (I’m not sure how to quote properly yet sorry!) 

I said weather damage but it’s actually ‘storm damage’ and the insurers that covered the work have a criteria you have to prove happened for the claim. It was things like the wind mph being over a certain amount and the rainfall volume (Storm Dennis last feb was when it happened) it does also say there appeared to be a drainage issue prior and the wall failure was ‘multifaceted’.
It says it was underpinned as without, it compromised the foundations of the house.

I will not try any more insurance quotes! Thanks for the heads up I don’t want to be accused of fraud at this point, it’s stressful enough!! We’re checking now that the current insurer will continue cover for us but if we do use another company I will make sure I discuss the wall as I wouldn’t want invalid cover. I tried testing outbuilding purely because retaining wall wasn’t an option on the online form but I realise we need to speak to insurers directly and not use online quotes in this particular situation.

Thanks again for taking the time to reply it’s really appreciated, its difficult to stay balanced when your hearts set on a property.