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Can You Sell a House with Subsidence

Property Saviour » Problematic Properties » Condition » Can You Sell a House with Subsidence

Subsidence claims have been soaring in recent years, with some firms seeing a huge 480% increase year-on-year.

Initially, it was assumed that the surge in claims was due to inadequate construction of the buildings, but many were actually due to the hot and dry weather the UK has experienced throughout the summer, which has an impact on the soil below the property.

Subsidence can be expensive to repair and can also push up insurance premiums, making a property less desirable to buyers. According to a survey, large claims can cost homeowners around £30,000, with some exceeding £500,000.

This type of claim was last seen in 2018, when an unprecedented 23,000 claims were made, amounting to £145 million, due to a particularly hot summer. Keep reading to know more!

Under these rules, sellers are required to disclose all relevant information about the property to potential buyers, both the good and the bad.

This ensures that buyers have all the necessary facts to make an informed decision. Failing to disclose important information that is later discovered during a survey or discussion can result in prosecution, as withholding such information is considered a criminal offence.

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What is subsidence?

Subsidence occurs when the ground beneath a house sinks or caves in. This can be especially troublesome when the ground is sinking at different rates, as it can cause the property’s foundations to become misaligned, resulting in a risk to the structure of the building.

London and the South East, where the soil has a lot of clay, are particularly prone to subsidence. The clay will expand in wetter conditions, then contract when it gets hot and dry. This can exacerbate the issue of subsidence.

What are the signs of subsidence?

Signs of subsidence include cracks in the walls and floors that are sloping at an angle. However, these cracks may not necessarily be a sign of subsidence. Cracks that are related to subsidence typically:

  • Appear near windows and doors
  • Are wider than 3mm
  • Are visible inside and outside
  • Run diagonally across a wall

Other signs to watch out for are:

  • Wallpaper that is rippling
  • Doors and windows that are sticking when opened or closed
  • Cracks between the property and an extension
  • The home appears slanted or crooked
Can You Sell A House With Subsidence
If an estate agent is aware of subsidence when giving the property a valuation, they may take this into account and the estimated value of your home may be lower than expected.

How does subsidence affect property value?

Subsidence can have a huge effect on the value of your home. If an estate agent is aware of subsidence when giving the property a valuation, they may take this into account and the estimated value of your home may be lower than expected.

Additionally, if a buyer is still interested in purchasing the property despite knowing about the issue, they could attempt to negotiate on the price during the sale. This could mean you receive an offer that is not what you had hoped for.

How much does subsidence devalue a property?

The severity of the subsidence will affect how much your property’s market value is decreased. 

Subsidence can cause major structural issues and, in most severe cases, require demolition and full rebuild.

According to The Royal Institution of Chartered Surveyors (RICS), subsidence can cause a reduction in property value of anywhere from 5% to 50%, depending on the extent of the damage. In extreme cases, subsidence can render a property unsellable.

Even if you seek the advice of a qualified structural engineer or surveyor, they are likely to charge you a king’s ransom and recommend that ‘it is professionally monitored for a couple of years to establish if it is historical or current’ but what happens if you need to sell the property now?

This is where Property Saviour come in.  We are willing to take a view on the subsidence, make you a cash offer with no fees to pay, and allow you to move on. 

We’ll take our chances with your subsidence and deal with it in our own time.

How to sell a house with subsidence

You can still sell a property with subsidence, but you should expect to accept a lower asking price. This gives the buyer the chance to take care of any subsidence or settlement issues that need to be addressed. Cash buyers are usually the only ones willing to purchase a property with subsidence since mortgage lenders will generally not take the risk since the property is uninsurable in its current condition.

Selling an underpinned property
When selling, it is a good idea to provide the name of the insurer so that the new occupants can continue under the same cover if they wish.

Selling an underpinned property

When it comes to selling a property that has been underpinned, it is necessary to declare this fact. Not doing so could lead to legal difficulties, as the Misrepresentation Act 1967 offers buyers protection.

When selling, it is a good idea to provide the name of the insurer so that the new occupants can continue under the same cover if they wish. This could be helpful for any potential future subsidence claims.

The positive for any potential buyer is that the foundations are now stronger than those in houses with no subsidence issues. However, sellers can still expect a loss of 20-25% in property value.

What impact does underpinning have on a mortgage?

Underpinning usually does not affect getting a mortgage. Your estate agent can give potential buyers peace of mind with this information.

Your property survey will show that the underpinning has been done to a high standard and your house has no current structural problems and is not in danger of further subsidence.

Houses with existing subsidence issues will be denied a mortgage. This is why you should take care of any structural issues before you put your home on the market.

The only other instance where a mortgage may not be given is concerning insurance. If a house cannot get house insurance, then a lender cannot approve a mortgage. This is because the basis for a mortgage depends on the property being insurable.

But, as mentioned, if the property is sound and there are no issues in the survey, this should not be an issue.

Selling A House With Subsidence History - But Repaired

If your property has been affected by subsidence in the past, you must declare it. Unfortunately, there is no time limit on how far back you need to declare it, so you must mention it no matter how long ago the subsidence occurred.

If the issue has been properly fixed, it shouldn’t happen again and it should give any potential property buyer peace of mind as long as all the paperwork is in order. However, the history may put off some buyers who want to take extra precautions, making it more difficult to sell the property.

How To Get A Subsidence Survey
A certified surveyor from the RICs will first start with a visual subsidence survey to see if there are any signs.

How To Get A Subsidence Survey

If you think your property may be suffering from subsidence, it is best to get a survey done. A certified surveyor from the RICs will first start with a visual subsidence survey to see if there are any signs.

They will then be able to determine if there is a serious issue, which may not be obvious right away and may require monitoring over a longer period. The survey will confirm if subsidence is present, how extensive it is and what the cause is.

The cost of a subsidence survey can vary widely, so it is important to get quotes for your specific situation. Generally, it costs between £150-200 per hour for a surveyor to be at the property. If the survey concludes that there is no sign of subsidence, it is likely to be cheaper.

If the property needs to be monitored, this could take up to 10 hours, making the survey cost up to £2,000. It is recommended to speak to multiple surveyors to get the most competitive price.

The Full Cost of House Subsidence

In most cases, you can easily remedy the structural issue by removing a tree which is the most common cause of subsidence. This is relatively inexpensive. If you are unlucky and need to underpin your house, it is going to be far more expensive.

The price varies depending on party wall agreements, the location, the area to be repined, and the cost of notifying your local building control.

There are also various underpinning methods, with prices ranging from £1,200 to £2,600 per square metre. It may take weeks or months to complete, depending on the size of the area to be underpinned.

You must also consider the cost of repairing the property. This depends on how long the subsidence issue has been going on and the amount of damage it has caused.

How Can We Help?

If you have a property that is affected by subsidence and you’re looking to sell it, this can be daunting. Most estate/online agents will not accept a property that has subsidence and hasn’t been treated yet, as it is too costly for them.

It is likely that only cash buyers will be interested, as mortgage lenders are unlikely to grant a mortgage on a subsidence-affected property.

But don’t worry! Property Saviour will buy your property quickly, even if it has subsidence. We won’t offer you the full price, but we will give you a fair price- this is something we offer to all our customers.

We have a team of experts nationwide who can resolve the issue before we resell the property, giving you peace of mind and a lump sum of cash to do with as you wish.

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