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Thread: Residential property , historic Subsidence & Valuation....

  1. #1

    Residential property , historic Subsidence & Valuation....

    Hi

    We have finally got round to looking at moving after 20yrs in the same house....a process that took us over 6x months to take the plunge and actually put ours on the market ( and currently Sold STC to a cash buyer in rented - lovely ! ).

    This was mainly driven by finding a house we both liked ( well the missus loves ) , decent size rooms , period feel and a decent corner plot to boot and nearer the seafront too ! It's also a probate sale ( obviously empty ) and being sold by the remaining sister. After a period of negotiation we all agreed on a ' fair ' price for a house that hadn't been touched for 40yrs ( you know , it needs new kitchen , bathroom , toilet , rewire , boiler etc etc ).

    Now this is where is gets interesting....

    Our Solicitor sent a bundle of paperwork from the Seller during the week and drew our attention to a set of 4-5x letters from Summer of 2006. These relate to an Insurance claim by the owners on Halifax Insurance. The issue appears to be the main pipe supplying a soak away drain located in the front garden had been breached by roots and the leakage had caused the foundations to move ever so slightly. The claim was agreed and £16k later a new longer plastic pipe/drain had been installed , to the House the internal & external 1-2mm cracks under windows , over doors , across ceilings over both floors had been resin injected and the front door step 5mm crack had been completely removed and replaced plus fit & finish all made good.

    No under pinning was required. I think the only evidence that remains is a vertical crack that remains in the front garden wall ?

    Now this has come to light , our initial reaction was to withdraw from the deal as the ' fair ' market price we agreed for a house in normal condition and with a ' clean ' history in our view no longer applies. The Seller had previously also stated at the time of accepting our offer that she wouldn't drop any further even if anything came out of the survey ( so we assume she clearly knew of the insurance claim by her sister and decided to withhold this particular gem ! ).

    Having spoken further with our Mortgage lender and Home Insurer ( John Lewis ) it has become clear that:

    1) A full structural Survey would be required by the Lender & any Insurer.
    2) Certificate for Works completed in 2006 by the Halifax Insurance provided.
    3) John Lewis won't Insure a house which had a previous ' Subsidence ' claim against it ( only if they had been the Insurer at the time ) - NB We are moving our Home Insurance from John Lewis to Aviva in January anyway....they said they would look at it subject to the above docs both being satisfactory.

    So , 2x questions please:

    a) If the price previously agreed was ' fair ' , now that we have better information and knowing Halifax Insurance should have carried out everything required to leave a sound building ( you would never know when viewing that there had been a problem....and we've viewed multiple times ) do you think there should be a discount to market for a house tainted with the label of subsidence ? If so , what % of discount would you be looking for....5-10% or ???

    Clearly options for Insuring it are narrower considering John Lewis reaction , so may well be higher costs longer term and of course , £1-2k structural survey costs to be found and which could also turn out badly for us ( unlikely though I feel ).

    b) Are we mad and should we continue to walk away and look elsewhere ?

    Let me know what you think please -

    Best - Neil

  2. #2
    I think I’d look for something else,you’ll have fun and games when you try to sell it


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  3. #3
    Yes think I would move on as my mother in law had evidence of subsidence twice on her house in London and it was never right even after lots of works being carried out both times!

  4. #4
    Master village's Avatar
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    We looked at buying a house some years ago which,it turned out,had suffered subsidence in the past. My memory is a bit hazy but I'm sure I read somewhere at the time that even if you could get an insurer to cover the house (at much increased premiums and excesses) that they could choose to end this cover at any time?
    Anyhow,just on the future resale problems I would walk away.

  5. #5
    Master mart broad's Avatar
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    Lousy situation especially when the property ticks the boxes however the only way i would go forward is a serious drop in asking subject to a full survey and a full report from the Halifax, having read your post and the attitude of the seller this looks unlikely so walk.

  6. #6
    Grand Master JasonM's Avatar
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    I would at the very least ask them to contribute to a full structural survey to see if there are actually any issues remaining and negotiate on the findings. It depends on how bad the subsidence was at the time and how much work was involved in putting it right. It may not have been too bad, If its the ideal house bar this I would pursue it a bit more. No underpinning would suggest it was mostly cosmetic damage? I don't know how much ground work 16k buys you, it may that the drain work took up a lot of that.

    The current homeowner will likely get this situation with every prospective buyer so its in their interest to have access to a full survey anyway.
    Last edited by JasonM; 8th December 2018 at 11:12.
    Cheers..
    Jase

  7. #7
    Grand Master
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    Considering its 12 years since the work was completed this is ample time for problems to manifest themselves if the remedial work hadn’t been successful, that’s my view, and a full structural survey should confirm this. What is the risk of the same problem with drainage happening again and is it possible to check/monitor for this happening? That would concern me, if the problem was deemed to be a 1-off that almost certainly can’t reoccur I’d be happy, but getting that reassurance could be difficult.

    If the house ticks enough boxes, and the price is OK, I think I’d go ahead on proviso that the survey was favourable. However, I’d be looking to renegotiate the price to reflect the house’s history; ideally the seller should’ve been up front about this and I think you’ve got reasonable grounds to seek a reduction.

    Recently I was interested in a house that’s approx 100 yards from any other property, with a long thin garden which has power lines running over part if it. The house had been sold but the buyer pulled out owing to the proximity of the power lines and the scare stories regarding the health hazards of electromagnetic radiation. I did some reading and convinced myself there was no hazard, but the potental effect on the value and future sale concerned me; buyers make emotive decisions and some folks are easily scared off, and that could be a problem for the OP in future if he buys his house. I didn’t buy my ‘dream home’ either.........nothing to do with the power lines, simply the fact that I couldn’t really afford it, it may have turned into a money-pit and I’m at the wrong stage of life for that.

  8. #8
    Quote Originally Posted by JasonM View Post
    I would at the very least ask them to contribute to a full structural survey to see if there are actually any issues remaining and negotiate on the findings. It depends on how bad the subsidence was at the time and how much work was involved in putting it right. It may not have been too bad, If its the ideal house bar this I would pursue it a bit more. No underpinning would suggest it was mostly cosmetic damage? I don't know how much ground work 16k buys you, it may that the drain work took up a lot of that.

    The current homeowner will likely get this situation with every prospective buyer so its in their interest to have access to a full survey anyway.
    Gents

    Thanks for the input so far....all very welcome !

    Jason , ( my bold ) I'd tend to agree with you on both points....I think this is partly why I posted as it feels ' cosmetic ' , however the Insurers decision at the time to classify it under ' Subsidence ' is now forever there.

    We certainly aren't serial property flippers....20yrs+ in our current place and was expecting the next move to be our last , but then we could just be creating issues for our Sons in the future when they inherit.

    Best - Neil

  9. #9
    Grand Master JasonM's Avatar
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    I think you are sensible to be cautious Neil, its easy to let the heart rule the head when you think you ( or the wife! ) have found the ideal house.
    Good luck with it, its a stressful enough time in ideal circumstances.
    Set yourself some red lines, e.g., if the seller refuses to contribute then walk. Is the certificate by the Halifax readily available? Etc.
    Cheers..
    Jase

  10. #10
    Master Thewatchbloke's Avatar
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    If it's the house you really want then get a full structural survey done. If it comes back all good with no further movement over the last 12 years then that will also be permanently on the record. It sounds like it will be your last house move so when selling any questions about the history won't be an issue to you, if it gets a clean bill of health with the survey and is documented thoroughly it shouldn't be an issue to your kids either when the time comes.

    Insurance companies are run by men of timid heart unfortunately and they tend find risk where common sense says there isn't any!

  11. #11
    Master
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    I see things like this at work regularly (have 7 mortgage advisers so see just about everything) and there’s various things to consider.

    Firstly without the paperwork sent to the Solicitor you’d be none the wiser as presumably the ‘valuation’ didn’t pick anything up, so you now have information that wouldn’t have and in all probability you’d have lived there for years and never know. As someone else has pointed out, if it’s been fine for 12 years, chances are it’s fine full stop.

    Secondly and now more importantly, you now do know and because of that, it would be naive not to be cautious. A full structural survey would be a 100% requirement before you even consider carrying on. Be aware though that these surveys will often pick up other things which can be good for negotiation on price, but also sometimes things that aren’t really an issue, yet they become one. In an ideal world I’d want the seller to contribute, but most sellers wouldn’t as it’s a personal choice for the buyer . . . . . However it’s worth pointing out that this could be an issue for any buyers that come along after you. It probably won’t go away, so it’s in their interest to get it sorted.

    Thirdly and for me the most important point. Even if we assume that it’s not an issue, will you be faced with these issues if and when you come to sell? I always think that’s something often overlooked by buyers - just because ‘you’ decide you can live with say a noisy road, or small garden, or previous subsidence for example, will others worry about the same things that concern you, but pull out?

    I’m not saying I’d not buy, but I’d be very wary. I’d look at other similar properties in more detail and unless this was a particularly good deal, wouldn’t take the risk. Only you’ll know how good a deal this is and how much the property means to you.

  12. #12
    Craftsman
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    Getting a full survey is easy enough but won't the certificate of works for a repair made 12 years ago be a bigger issue? If the vendor hasn't got this it's going to be very difficult to obtain this.

  13. #13
    I would steer clear of it. The house obviously requires a lot of work anyway so who knows what a structural survey will turn up.

  14. #14
    Just my 2p's worth.

    There's lots of houses out there & whilst this may tick all the boxes, if it has potential to become a right royal PITA due to something you are now aware of (I'd be thanking your Solicitor for that), then that's a damned big box for it not to tick.

    You're talking about your home, a lot of money & the potential that if it does become a nightmare you'll struggle to move it on (just insuring the thing is probably going to be hassle). Any remedial work will also only be as good as whoever did it, true it might be totally fine & there will never be a problem again.. but do you really want to take that risk? Personally I'd just spend all my time looking at the walls & waiting for a problem. However I have to say I am risk averse.

    Personally, I wouldn't walk away, I'd run.

    All the best

    Dave

  15. #15

    Residential property , historic Subsidence & Valuation....

    I’d go for a Structural Engineers Report ( not a structural survey) as the conclusion from a structural survey may well be that the surveyor recommends a structural engineers report. Also if you decide after an engineers report to continue with your purchase then I would also look to keep the insurance with the Halifax as per the current owners for continuity.
    Also you may be able to get a ‘certificate of structural integrity’ which would have been issued when the previous works were completed.

    Sent from my iPhone using Tapatalk
    Last edited by NIGE UK; 8th December 2018 at 18:33.

  16. #16
    Master
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    I would probably walk away, but would be tempted to ask the seller to pay for a full structural survey rather than invest any more of your own money. Depending on what that says, you can then accept, renegotiate or walk away. They seller is selling a property with subsidence, and should have to declare this if known, so the structural survey would be beneficial for them to have anyway

  17. #17
    Craftsman Tifa's Avatar
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    Run....don't stop..don't look back...just keep running....run until you feel your heart is about to burst.

    Could be a killer when/if you need to sell.
    You'll always find a house you like better, for less money....they're there.
    Got to look harder.

  18. #18
    Master oldoakknives's Avatar
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    Why buy problems, there are always more houses coming available.

  19. #19
    Master KavKav's Avatar
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    I can only say what I would do in your boots and I would walk away. Subsidence is a masking cloak and you can never be sure of the spread of the issue. The fact that a certificated repair has been done does not give you comfort zone visibility of the effects of that subsidence. I accept it may well be minor but the trick is accurately defining ‘minor’ in the face of the cracking evidence and a structural engineers report will likely be expensive and whilst informative, will almost certainly contain the usual arse-covering caveats.

    Too many imponderables here and there are plenty of properties available without this issue and do you really want the word ‘subsidence’ embedded in your brain from the day you move in?

    I say walk and good luck in finding what you want.

  20. #20
    Craftsman
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    We had subsidence on our detached garage , necessitating £17K rebuild. Now we cant move away from our existing insurer as as soon as the question is asked” has the property been subject....”. The prospective insurers just refuse to quote.

    We know we will have issues when we sell, but we have no choice. You have a choice, exercise is, as stated above why buy a potential problem. The soakaway pipe has been moved but what other issues underpin the property ( see what I did there) .

    As stated above houses are like buses, it may not feel like at the time but another will come along, and being in rental means you are in the box seats for an offer

  21. #21
    Master
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    My parents had a similar issue but for them there was underpinning that had been carried out!!
    They spoke to all of the family after speaking to the surveyor, solicitor and builders at which point they carried in with the purchase at the agreed rate!!
    Unfortunately for you they were cash buyers so no real hassle except moving insurances however they did say if they were thinking that this wasn’t their last move then they would have pulled out!!
    They would not want the hassle of trying to sell a house with previous subsidence in the future(although we will when we inherit it🤣🤣👍🏻)

    For me personally I would move on to another house!
    I’m sure that after works being carried out the property is fine but it puts people off and makes it a hassle in the future which is a deal breaker when moving is such a hassle anyway!! If they had been upfront and the property was advertised with said works having been carried out so all parties were aware and the price was very attractive for all the extra hassle from possible buyers, when you sell again in the future I would have said go for it!!
    Having said all of that if it’s your forever home and you will add value from all proposed upgrades anyway, added to the fact the wife loves it then go for it!

    Chris

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