Viewed Property with Subsidence – Worth the Risk?

FreeBear

Lets_fly said:

Albermarle said:

Lets_fly said:

Grumpy_chap said:

Lets_fly said:

My questions are:

• Is it worth taking the risk if the price and location are excellent?

• Are these kinds of issues reasonably fixable?

• Would this affect insurance, resale value, or mortgage approval?

Would love to hear from anyone who’s dealt with something similar or has advice.

If this subsidence could be resolved easily, why haven't the vendors resolved it prior to sale?

I suspect you would be unable to obtain buildings insurance, certainly you won't obtain insurance to cover the subsidence as a pre-existing issue.  You will need to pay for the subsidence to be resolved yourselves, and put up with all the hassle.

Any future buyer will review the history of subsidence and ask the same questions you are asking and will take into account in their assessment of the value.

The mortgage will be subject to the value of the property, which must be impacted by the subsidence that has occurred.  In fact, with all this subsidence, why do you even need a mortgage?  Surely, the house is available to purchase at a token value that you can pay cash?

They have reduced the asking price by just  5% . Its  on market for 575K. Recent sales in that road are around 600k. Actually the seller could not pay mortgage so now the bank or some financial company want to sell it. 

because it’s in a premium location and priced quite low for the area.

When you said that and looking at the state of the place, I was assuming it was more like £100K less than similar properties.

I'm hoping they might give it for around 500k. But the question I had was, is it worth even considering this property with all this issues. i keep hearing all of London is on clay and this has shown subsidence effect on the property and just plastering the cracks on the walls will fix it.

Vast parts of London are built on clay - This type of soil is prone to shrinkage & swell (heave) which can cause problems where a property has shallow foundations. Much of the time, shrinkage & swell is minimal until something affects the water content of the soil - This could be the removal of a large tree, or water extraction lowering the water table.

Subsidence is often where water has washed away some of the subsoil causing the foundations to collapse (it can also be the result of old mine workings). Although, if you lived in Hackney around the turn of the century, a 5'7" mole did cause a few issues -> https://en.wikipedia.org/wiki/William_Lyttle

Slinky

Our house has a single storey side extension that was underpinned in 1990. We think it was a collapsed drain rather than trees, probate purchase so details were sparse. It cost £9K in 1990. We bought in 2017 and were only able to get reasonable buildings insurance with a £1K standard subsidence excess because it was more than 25 years earlier. We still have only a limited number of options now when we put our details into price comparison sites and it's 35 years since the problem was fixed. Once underpinned, the marker never goes away, even if it was a garage that has been demolished.

Even if you manage to get this problem sorted without it bankrupting you, you will pay through the nose for insurance, and your subsidence excess will be very high, for years and years and years.

I would not take that property as a gift, never mind half a million quid plus.

Grumpy_chap

jimbog said:

Just plastering the cracks won’t ‘fix it’ it would only hide it. 

Plastering the cracks won't hide it very well or for very long.

The solution would seem to be to knock the house down and start again with proper piling foundations from the outset.

Even the £100k reduction seems insufficient in my opinion.

Tabieth

Lets_fly said:

Albermarle said:

Lets_fly said:

Grumpy_chap said:

Lets_fly said:

My questions are:

• Is it worth taking the risk if the price and location are excellent?

• Are these kinds of issues reasonably fixable?

• Would this affect insurance, resale value, or mortgage approval?

Would love to hear from anyone who’s dealt with something similar or has advice.

If this subsidence could be resolved easily, why haven't the vendors resolved it prior to sale?

I suspect you would be unable to obtain buildings insurance, certainly you won't obtain insurance to cover the subsidence as a pre-existing issue.  You will need to pay for the subsidence to be resolved yourselves, and put up with all the hassle.

Any future buyer will review the history of subsidence and ask the same questions you are asking and will take into account in their assessment of the value.

The mortgage will be subject to the value of the property, which must be impacted by the subsidence that has occurred.  In fact, with all this subsidence, why do you even need a mortgage?  Surely, the house is available to purchase at a token value that you can pay cash?

They have reduced the asking price by just  5% . Its  on market for 575K. Recent sales in that road are around 600k. Actually the seller could not pay mortgage so now the bank or some financial company want to sell it. 

because it’s in a premium location and priced quite low for the area.

When you said that and looking at the state of the place, I was assuming it was more like £100K less than similar properties.

I'm hoping they might give it for around 500k. But the question I had was, is it worth even considering this property with all this issues. i keep hearing all of London is on clay and this has shown subsidence effect on the property and just plastering the cracks on the walls will fix it.

No, it’s not worth considering this property. A couple of the replies have said they would only pay for the cost of the land and demolish and build new, I agree with them. I’m no expert but even I can see this is well beyond “plastering the cracks”. It’s a very bad buy and I wouldn’t touch it. 

Albermarle

Grumpy_chap said:

jimbog said:

Just plastering the cracks won’t ‘fix it’ it would only hide it. 

Plastering the cracks won't hide it very well or for very long.

The solution would seem to be to knock the house down and start again with proper piling foundations from the outset.

Even the £100k reduction seems insufficient in my opinion.

You are probably right, it was just a figure I plucked out of the air.

HillStreetBlues

Lets_fly said:

I'm hoping they might give it for around 500k. But the question I had was, is it worth even considering this property with all this issues. i keep hearing all of London is on clay and this has shown subsidence effect on the property and just plastering the cracks on the walls will fix it.

You're going in totally blind, wanting a set discount but without any knowledge of what the discount actually needs to be.
Houses like this are for people who know (as best they can) what it all involves, or the total foolhardy.

Section62

Grumpy_chap said:

jimbog said:

Just plastering the cracks won’t ‘fix it’ it would only hide it. 

Plastering the cracks won't hide it very well or for very long.

The solution would seem to be to knock the house down and start again with proper piling foundations from the outset.

Even the £100k reduction seems insufficient in my opinion.

I think the knock-it-down-and-start-again approach is certainly a possibility, but not without first having a detailed survey and engineers report.  As I posted already, the horror photos are showing (presumably) render which are riddled with cracks.  However, I can't make sense of the pattern of cracks, so would keep an open mind that at least part of the problem is simply failed render.

As I also mentioned, the internal caracking is more worrying, but without the context of where these cracks are and how much of the building is affected, I'm not sure there is enough to be certain that demolition is the only option.  For example, if the internal cracks are limited to (say) an extension then it wouldn't necessarily make sense to demolish the whole house.

Another issue is if the property is a semi (the OP hasn't said, but it feels like it might be) then knocking this half down without affecting the neighbour's half is going to make the rebuild project 'interesting'.

But whatever, it isn't really a FTB project.

GDB2222

The key question is whether the house is being sold with the benefit of the insurance claim? In other words, if you take on the house will the seller's insurance company pay for the repairs and underpinning? 

Grumpy_chap

This thread seems to have remained standing longer than that house will

I actually wonder whether all the discussion is wholly moot - I suspect the property in the current condition is not mortgageable and the OP seems to need a mortgage.

If the house is still standing, the question has to be whether the house will outlast a lettuce?

Bigphil1474

OP, we had subsidence in our house around 2010. It was caused by a leaking drain to front which meant the bay moved forward about an inch and caused some cracking. The insurance monitored the house for a year to make sure it had stopped moving after they had repaired the drain and done some remedial work (no underpinning). After a year, they repaired the cracks, replaced the bay window, internal re-plastering etc. (including removing old asbestos containing artex), and we took some money for redecorating as it was worth it to cover off the £1k excess. Took about 18 months all in. Total cost was around £25k to the insurance company. That house looks 10 times worse.