You may have found your ideal home, discovered it has structural problems and are wondering if you can get a mortgage on a property that has been underpinned.
Generally, there is no reason why a lender cannot offer a mortgage for an underpinned property as long as the survey report confirms that the work has been completed to a good standard and that there are no ongoing structural problems. Also, to satisfy the surveyor, the cause of the subsidence needs to have been addressed. You should always consider investing in a full structural survey report for a property that has had previous structural problems.
Always bear in mind that if you you are unable to obtain insurance for a property affected by subsidence (and occasionally this is the case) then generally you won’t be able to obtain a mortgage. This is because one of the requirements of the lender’s mortgage offer will be that you can obtain insurance for the property and this will need to include cover for the ‘peril’ of ‘subsidence, heave and landslip’.
Insurance for property that has been underpinned is available but you won’t be able to buy it by comparing from the online ‘mass market’ providers. Cover is certainly available – and at sensible levels of premium.
To enable you to obtain a quote to cover subsidence, heave and landslip you will generally need the following information;- The date of the subsidence, the cause, the cost of repairs, whether the cause has been removed / eradicated, what work was carried out.
Answers to these questions may well need you to make enquiries with the vendor of the property you are looking to buy. If they are as keen to sell as you are to buy then they should be more than willing to provide the information you require. Some providers will offer a work guarantee for further peace of mind so and about this too.
A word of caution – if an insurer provides a quotation for a property that has previously been underpinned then they will usually apply and excess of £2500 rather than the usual £1000. This needs to be acceptable to your lender so make enquiries as to whether this will be okay prior to going to the expense of surveys etc. We have had a very small number of policies not taken up (and sales fallen through) due to the lender insisting that the excess is no more that £1000. Unfortunately some lenders move at iceberg pace and have not increased their £1000 maximum excess requirement for a decade or two!
What exactly is subsidence?
Subsidence is the downward movement of the site on which a building stands -where the soil beneath the building’s foundations is unstable. The movement is not caused by the weight of the building.
Most household insurance policies cover loss or damage caused by subsidence, heave and landslip. They only cover the cost of repairing the loss or damage. They do not cover the cost of preventing further subsidence.
This means the cost of repairing damage (such as cracks) to the building’s superstructure is covered. But the cost of stopping the building from moving in the future is not covered. Realistically, to make sure and effective repair will last, a reasonable period of time, the insurer will usually have to carry out work to stop the movement first (unless it has already stopped).
Subsidence damage to a property is not to be feared, more something that needs to be understood. Unless you’ve has previous experience of it, you will probably know little (or nothing) about subsidence damage to property. Make the necessary enquiries, look at the survey report, consider any work guarantees and legal documentation and after a little digging around for information, you will be in a position to decide if the property is one for you.
More information http://www.bickersinsurance.co.uk/our-product/insurance-for-previously-underpinned-property