Property we are exchanging on has subsidence issues - SE London !

[firsttimer08]

We are just about to exchange and we find out that the property we are buying has suffered from subsidence (not once, but twice !). The surveyor never picked up on it, so our mortgage got approved - but of course now we are very concerned. This is after all SE London - so we wonder whether this is all very common.

Has anyone in this forum bought / sold properties in SE london which suffered from subsidence. Would you do it again and more importantly, how much of a reduction in the properties market value would you expect? We really love the house and so don't want to pull out just yet. We are considering asking for a price drop - but then how much of a price drop would you expect - 10%, 20%?

[lalalonglegs]

I think the important thing is to find out when the house suffered from subsidence, what course of action was taken and why it happened a second time. If the house has had to be underpinned and their are lots of guarantees in place, it wouldn't worry me too much BUT it might worry your mortgage company and it will make insuring it very tricky.

It could be something very minor - lots of Victorian properties, for example, only had very shallow foundations for their bay windows so these can come away from the main structure of the house which is a nuisance to repair but doesn't compromise the overall integrity of the building, iyswim. (I bought a flat where this had happened and it cost a few thousand to repair but I was able to keep the original insurance on it so not a huge deal.)

Regarding how much you should ask as a discount, well, it depends if the house is still mortgageable... Just because your lender doesn't know at the moment doesn't mean that a future buyer won't find out and it could scupper any chance of resale if it is serious enough.

At this stage, I would want a lot of details about when and why and what has been done. I used to live in SE London and while I was there, there were several cases of old chalk mines opening up in the Blackheath/Greenwich area and causing huge damage to roads and neighbouring houses. I think you have to let your head rule your heart in this case and speak to your surveyor about (a) why it wasn't spotted and (b) how it would affect the valuation subsequently.

[LemonEmmaP]

We bought an SE London house (DA postcode) which had subsidence issues. The price we were paying was already some way below the asking price and we were comfortable with it so didn't ask for a further reduction. However, our vendor was very open about the subsidence when the survey was done, and provided all the supporting paperwork, so we had reason to feel some confidence. That said, the subsidence had happened just a couple of years before we bought (with a sign off that there had been no further changes after one year; then there was a further year from when the house went on the market to when we completed on it).

Practically, this has meant that we can only get buildings insurance from the current provider (or one other that wanted astronomic charges). You should make sure you know how much the vendor currently pays, and ensure that the policy is passed to you (not sure of the proper terminology here but hopefully you get the gist).

Would I do it again? Maybe! If I'm honest, probably not again so soon after a subsidence problem has been addressed, but old subsidence wouldn't particularly bother me. Indeed, our neighbours said 'Oh, everyone on this road has had that!'.

Good luck

[firsttimer08]

The property has not been underpinned but superstructure work has been done to fill in the cracks. First time it had 3-4 years ago and now the problem has reappeared related to a tree and work has been done only last month (after our surveyor visited - so he should've technically spotted those cracks, before they were filled in !) and the tree removed. I feel the main risk is that since they have only rectified the problem recently, only time will tell whether it will reccur or not.

I spoke to our mortgage broker and our lender would be advised by our solicitor of this information, even though we have a mortgage agreed - though I am not sure whether after this news they can pull out or not.

You are right - we should follow up with our surveyor first (we had paid for a full structural survey and it seems he failed to spot something so major) and think with our head. Even though it is a great house, at the end of the day we do not imagine living there forever. I didn't even think of the fact that other buyers could also have a problem in getting a mortgage.

It is disappointing because we missed out on several other properties we liked, which are now already sold and we face the prospect of restarting our house search during summer time when not too many properties come on the market in any case.

[firsttimer08]

LemonEmmaP thanks ! that is exactly it - that the subsidence in this property has only been corrected last month (the vendors did not mention anything to us - until our solicitor asked the question!) - so we have absolutely no way of knowing whether the problem is indeed corrected or not.

Its the same here - that all the neighbours have suffered from this problem - so no-one seems to think it is a big deal and that is why I wonder whether we are being overly concerned as everyone in SE london seems to have subsidence issues and properties do get bought and sold (given the undersupply anyway).

We need to speak to the insurers - but at the moment their home and contents is approx close to 2-3 times what I would find online for a house with no subsidence and that may be an indication itself of the risk. Was your insurance cost well above the typical cost too?

[thingsabeachanging]

Seems that way we have just lost the sale of our house as our buyers sale fell through due to their (linked) neighbours house having subsidance and it affecting theirs.

All in the SE - I am currently taking a break from work with a cuppa mooching over it all.

[BikeRunSki]

Hi, I am a geotechnical engineer (someone who knows about ground conditions and geology to advise builders and structural engineers what they are building pn and it will behave).

I obviously don't know the details of your property or the reasons for the subsidence but:

• Subsidence very common in south London, as someone has said many Victorian properties has little or no foundations. Unless the house is less than about 20 years old, then this type of subsidence should have settled by now.
  
  

• Subsidence due to a tree (roots suck water out of the ground, ground shrinks, building settles) is generally associated with newer houses (although in the last 20 years or so it should have been designed out under the NHBC (National House Building Council) guidance.
  

• You say that the tree has recently been removed. This should rectify the problem to a greater or lesser extent, which should have been taken into account by a structural engineer before the tree was chopped. It will take a year or more (1 growing season +) for the ground conditions to settle to the new water demand (from no tree), but it should not be bad if the tree has been chopped properly.
  

• If the house is less than 10 years old it should still be under NHBC or Zurich guarantee.
  

-I'd say that subsidence need not be a show stopper, but you do need to go back to your surveyor to get a grip on the extent of the problem, and also inform the mortgage company (they have approved your mortgage based on different conditions to what is true) and look into buildings insurance.

HTH

[fumanchu]

As has been mentioned, check that the current owner's buildings insurance policy covers subsidence, check what the excess is (they may have increased it following the new incident), and check that the buildings insurers are aware of this latest. You should be able to take over the policy in your name if you proceed.

[enidroach]

There is a lot of subsidence in SE London (have lived in SE22 and SE21) - shallow foundations on victorian and edwardian houses, clay soil - the bays tend to sink and crack or the back "extension" (kitchen corridor) tends to fall and the very hot summers have not helped. Trees often suck up all the moisture if too near a house (eg on the street). Insurance companies are aware an area is one of subsidence and in these areas insurance premiums do tend to be higher.
However - if you tell an insurer about the subsidence and ask for a quote they will usually refuse (tell you to go to a specialist) or want all sorts of reports and then astronomical premiums - it is always best to ask the vendor to see if their current provider will continue to provide cover for you - you will be stuck with them. People in my street used to say - oh we all have that too - and bring me in to show me their cracks - none of them were told by vendors about the problem and when they sold they just covered the cracks and kept quiet ( not all solicitors ask)- if covered up and the floors are not too unlevel it can be hard to pick up in a survey!
If you admit it - it can be a deal breaker for a sale and you should ask for a discount - we never when we bought ( the bay had been infilled with concrete after some cracks because of a tree root and work done on the vendors insurance)and I always regretted it as it was hard to sell the house on 5 years later (we were honest) and we took a big cut in asking price (almost 1/7th of the price partly due to it) even though we had no more problems- think carefully - ask your solicitor for advice (although ours just said it was up to us)I don't think he told the mortgage company. I also used to really freak when any hairline crack appeared in the plaster as I constantly worried the subsidence had returned.
Good luck

[coloursoftherainbow]

I think you need to get a structural engineer urgently to look at the issue - don't proceed until you understand what you are getting into

[firsttimer08]

Thanks for your views and advice.

The property is more than 20 years old (close to 40-50 years old). The first subsidence was clay related (perhaps due to the hot summer), which was corrected by the insurer. The latest subsidence is tree related according to the engineers.

Wow 1/7th of the price is really quite a huge discount.

We have not had any structural engineers go to check out the property as yet. We have already spent so much money on getting, full structural survey, gas check, boiler check, electrics etc etc and I don't want to spend even more mone - because we are not sure whether we even want to take the risk of buying a property with two occurence of subsidence (especially as possibly we will have to sell the house on discount). We may ask the vendors for a discount, but I doubt they would agree as they probably would not be able to afford the house they wish to buy - so yet at the moment it seems, we will possibly be breaking a long chain ...

[Justfeckingdoit]

We had the same issue on a house we loved in SE21 last year. In every ore way it was perfect and having been looking for over 8 months we very nearly let our hearts rule our heads.

I did a lot of reading up on local forums and the main issue people in the area had was resale issues. If this is not a house for you mean to stay in forever, I'm afraid I woukd advise you to walk away.

There will be another house for you, that does not come with such major issues

[firsttimer08]

Its funny - a lot of people on the forum mention SE21 (which is where our house is too !).

[firsttimer08]

and we have been looking for 8 months too now and I'm afraid that summer time will get more slow.

Justfeckingdoit - I hope there was a happy ending to your house hunt? Did you find another property that you loved ?

[Justfeckingdoit]

firstimer08 afraid not! Still looking (though had a bit of a break after the subsidence house as it was too depressing)

[Snowstorm]

I've always thought that if a house was underpinned and there was a pattern of subsidance in the road/area, then I'd prefer the underpinned house to the ones that hadn't been done. I've never heard of reoccuring problems once a house has had the work done (although neighbouring houses may be suffering), so I don't really understand why the insurers are so anti insuring an underpinned house.