Mortgages for houses with a history of subsidence

How does subsidence affect properties?

Subsidence can cause cracks and structural damage to a property, potentially making it unstable.

It happens when the ground beneath a building wears away and sinks, disturbing its foundations and causing it to move.

Subsidence is more common in areas where homes are built on clay soil which can dry out and shrink in summer and episodes of drought.

Thirsty trees and shrubs located close to properties that absorb a lot of water from the soil can be to blame, too.

Subsidence can also happen on ground that has poor or faulty drainage, or in areas where flooding washes away soil.

Plus, homes built where mining has taken place in the past can subside because there are open spaces beneath them.

Can you get a mortgage on a property with subsidence?

Though it might put off many lenders, there are plenty who will give you a mortgage on a property that’s had subsidence in the past. A specialist mortgage broker can help you find those more likely to approve an application.

Mortgage providers will want to know that the subsidence has been completely resolved before they’ll consider lending to you.

That’s understandable because they want to be sure the property is a secure investment, in case it has to be repossessed and sold if you fail to make your repayments.

For this, you’ll need to find out from the seller exactly where the structural movement occurred in the building and what work was done to remedy the problem.

Ask for a certificate of structural adequacy or structural engineer’s report which shows that the cause of the movement has been removed, and that the structure is now sound.

You’ll also usually need to take out a full structural survey of your own to confirm that there’s no ongoing movement.

If a certain period of time has elapsed - for example, the damage to the home was over 10 years ago and there’s been no movement since - then you’re much more likely to be approved for a mortgage than if the subsidence was dealt with only recently.

If a house has current subsidence issues that are yet to be resolved, then it’s highly unlikely you’ll find a mortgage provider willing to lend to you. Generally, you’d have to be a cash buyer to buy a property like this.

Buildings insurance on homes with subsidence

In order to protect their investment, a mortgage provider will usually insist that a property has buildings insurance in place before lending. So, you’ll need to get this sorted before you can move ahead.

This can sometimes prove problematic if it has subsidence. Some mainstream insurance companies won’t even quote for homes that have been previously underpinned and that are in areas prone to subsidence issues.

So, your choice of insurers will be more limited, and premiums might be higher than average.

But there are companies prepared to cover homes that have a history of subsidence, especially if the issue happened 10 or more years ago and has been rectified, with no structural issues in the interim.

You may find that many insurers will ask for a higher excess, though.

Should you buy a property with historic subsidence?

Buying a house that’s had subsidence in the past might seem risky, but as long as you complete the necessary checks, it needn’t be a bad move.

Get as much detail from the seller as possible about the original damage and how it was fixed. And be sure to get hold of all the necessary proof that remedial work was carried out properly and effectively. Also, find out what’s been done to prevent any further damage from occurring.

You should also take out a full structural survey to confirm that there’s no ongoing movement. And investigate buildings insurance early on; you may need to take out specialist subsidence insurance which can mean higher premiums and excesses. A broker specialising in non-standard insurance could help you find competitive quotes.

Bear in mind, that when you come to sell, the market for your property will probably be considerably smaller because lots of cautious buyers will be put off buying a house with complications.

Is it possible to remortgage with subsidence?

If you own a home that develops subsidence and you’re looking to remortgage, most providers won’t accept an application until it’s been fixed.

Can you fix subsidence?

In most cases, subsidence can be resolved fairly easily. For example, by fixing plumbing leaks or removing trees close to the property.

Underpinning is used as a last resort and can be expensive - anywhere between £5,000 and £50,000 according to the Royal Institution of Chartered Surveyors (RICS). However, it’s estimated that just 10% of properties that have subsidence need this type of work.

Methods of underpinning include:

• Strengthening the soil by injecting it with a resin
• Filling sections of the ground with concrete
• Installing concrete beams or screw piling systems to support the foundations

How do surveyors check for subsidence?

Surveyors will generally be able to distinguish between cracks that might pose a serious problem and those that are settlement cracks, the result of normal movement in a building.

They’ll take special note of any cracks that run diagonally or appear on exterior brick walls - zig-zagged and following the lines of mortar. They’ll also look for other signs of subsidence like cracks in concrete floors and garden paths, as well as doors and windows that stick and are difficult to open and close tight.

To determine if movement is ongoing or has stopped, the surveyor will apply monitoring gauges on a crack to keep track of movement across it over a period of time.