Buying house with newly uncovered subsidence during survey?

PatrickBoomer

Hey all, I'm purchasing a house and everything was going smoothly, I've already got a mortgage offer, valuation was fine etc. until I did a L3 survey which uncovered potential subsidence in the rear extension. I proceeded to get a structural engineer in and the report basically says that there is subsidence and movement and it'll need repairing.

I've been able to knock off approx 7.5% on the asking price but as a FTB I am not entirely sure whether I can actually still proceed? I've found out I can get insurance without subsidence cover but not entirely sure if I need to let the lender know about my plan of basically buying it and repairing it? My broker said it's a private survey so no need but I'm thinking I do need to disclose it right? My solicitor basically didn't care so has anyone come across this before?

Thanks

HobgoblinBT

Good call on instructing a L3 survey. 

Subsidence can be very expensive.  My claim in 1989 paid out more to builders and structural engineers than I have paid in buildings insurance premiums since then. From our initial claim to works completion took over a year.

Your mortgage provider is likely to have some strict conditions if they are to lend after any remedial works have been completed, probably via the vendor’s buildings insurance.  You might be best to find another property.

Bigphil1474

We had subsidence on our bay window in 2011/12 - took a year to sort through the insurance and cost them about £25k to fix. It will depend on the extension (single storey?), amount of damage etc. whether it needs underpinning and so on. Did the structural engineer give you an idea on cost? 

Personally, if I thought the figures added up and I was happy to proceed, I would. If they didn't, I wouldn't.

ProDave

You mention subsidence in the rear extension.  Is this a substantial 2 storey extension?  Or a small single storey extension (not much more than a posh conservatory)?

This is probably less worrying than susidence in the main house.

If you bought a house with a clean survey and then it started so subside, the insurance would normally cover it.  If you buy it now, I am sure the insurance would not pay for a known fault at the time you bought it.

Any pictures of the extension?

EndlessStruggle

When I was pulling out of a house I asked my mortgage company about whether the issues would effect the mortgage and they said it would need to go back to the underwriters to decide and they would need to be told about it as potentially structural.

I'm sure I have to have the house insured in full and at full rebuild cost.

I would speak to your mortgage company as best not to fall foul of them.

Personally, I would be running away at the sight or sound of confirmed subsidence....

alanyau88

Run for the hills!

Yorkie1

When I bought my house, albeit a few years ago now, it was a requirement of the mortgage that I had buildings insurance with certain minimum cover and excess levels. 

Even if you get insurance to cover subsidence, make sure that any excess that is applied to the policy is acceptable to your lender.

Bigphil1474

It's typically £1k excess on subsidence, although there are ways round that - we agreed to redecorate ourselves, so we were paid the projected redecorate costs minus the excess. Still made a profit even though we had to DIY it.

PatrickBoomer

ProDave said:

You mention subsidence in the rear extension.  Is this a substantial 2 storey extension?  Or a small single storey extension (not much more than a posh conservatory)?

This is probably less worrying than susidence in the main house.

If you bought a house with a clean survey and then it started so subside, the insurance would normally cover it.  If you buy it now, I am sure the insurance would not pay for a known fault at the time you bought it.

Any pictures of the extension?

It is the rear extension, that contains the kitchen, I've added a picture. The initial survey basically said it'd be prudent to get a structural engineer which I instructed and their report said there's potential subsidence and in his words evidence of previous work being repaired. The thing is, I've gotten a discount that basically covers the repair works and then some more, the only issue I have is whether the mortgage would be honoured? I phoned them up and they told me that the subsidence is down to me, their valuations and reports needed have all checked out. Although I don't think the rep understood what I was trying to sta

PatrickBoomer

Yorkie1 said:

When I bought my house, albeit a few years ago now, it was a requirement of the mortgage that I had buildings insurance with certain minimum cover and excess levels. 

Even if you get insurance to cover subsidence, make sure that any excess that is applied to the policy is acceptable to your lender.

That's also an issue, I've read online you can "transfer" the sellers current insurance, I've also been able to source insurance but explicitly without subsidence cover (which doesn't affect me since I'm repairing it myself), just don't know if the mortgage would be covered since in the offer in their words it says "reasonable insurance includes subsidence cover"

PatrickBoomer

EndlessStruggle said:

When I was pulling out of a house I asked my mortgage company about whether the issues would effect the mortgage and they said it would need to go back to the underwriters to decide and they would need to be told about it as potentially structural.

I'm sure I have to have the house insured in full and at full rebuild cost.

I would speak to your mortgage company as best not to fall foul of them.

Personally, I would be running away at the sight or sound of confirmed subsidence....

I phoned my mortgage company directly and the rep said that their checks have all come through and any works/repair works that are needed are my decision to make. I don't think she fully understood what I was trying to say. I think I'll get my solicitor to email the post offers team and get explicit word that they'll honour the mortgage.