Valuation survey could not have been worse - 100% mortgage retention

[LeslieKnope2020]

I've just recieved the mortgage valuation survey and it literally could not be worse. The surveyor has recommended a mortage retention for the full amount for the following points:

"Evidence of movement was noted in the form of cracking to the rear addition. This appears significant and likely to be progressive"

"There are elements appearing to contain asbestos"

"Obtain a report on internal timbers and possible damp behind dry lining"

"Obtain a report on possible asbestos linings to the rear addition"

"Future demand is likely to be adversely affected by the fact that this is a refurbishment project and therefore not readily mortgageable to all lenders"

It sounds shit and I suppose we won't know the full extent until we pay for the structural survey but then what? What can we do? Do we ask the seller to put these things right before we buy? If it does have movement, damp and asbestos it will literally cost thousands - much more than we could afford to put right anyway.

We're first time buyers and this house is definitely 'the one'. I have day dreamed about my children growing up in this house, every christmas, every birthday party in the garden, every easter egg hunt, every winter walk around the village and coming back and putting the log burner on etc this house is perfect - we will not find a house like this one again. It was built in 1850, very unique and full of charm and it's actually quite large for our budget.

I'm clearly thinking with my heart here so I need unbiased opinions. What would you do?

Walk away - far too many issues to sort. Whoever sorts them out it will take ages.

Christ, walk away.

Walk away, because of the subsidence (movement) likely to continue. Asbestos can be removed by specialist contractors and damp can be fixed, but fixing subsidence is a much bigger project.

It really sounds as if you have picked the biggest house for the lowest price without really thinking it through tbh.

We've always bought houses that need a bit of doing-up but I've never seen that phrase on a mortgage survey - it must be quite bad!

I too would walk away. However, if your heart is set on it, get an full building survey. Go with an RICS qualified building surveyor from a reputable practice who's prepared to climb ladders etc. Cost wise, I'm thinking fees would be £1K plus.

With regards to the asbestos, you would need an invasive test in all suspected areas to confirm it. The testing alone would be £500+. Lots of asbestos can be left in place but removal would be ££££.

When you have costs for the required works, you can negotiate with the seller. Establishing what's needed though will be pricey.

very unique and full of charm and it's actually quite large for our budget.

If your budget stretches to major and lengthy structural work (during which you won't be able to live in the house) and then putting it all back in decorative order...

Honestly, you would be mad to buy this house. In addition to all the things you mentioned, you will have the constant maintenance involved in such an old property. The stress involved in taking on such a project just is not worth it IMO. I'm also not that keen on the asbestos thing... Why would you want even bother with involvement in that! I'm not sure damp can ever really be fixed anyway, despite the claims of many companies. House sounds so old and falling apart... Not a dream buy just cause it's old and big.

Unless you have a massive budget to sort these issues out you need to get your head out of the clouds and withdraw. These are massive issues that no vendor will just fix so you can proceed with your offer the same. With house hunting, there is always another house.

The sellers will not do the work, which means you will not be given a mortgage. Walk away, find another house, this one will be a money pit.

If I understand correctly, the surveyor has recommended a mortgage retention for the full amount until those works are done?

The warning bells can't ring any louder than this. **

This house in its current state is unmortgageable. It is pretty much uninsurable. A full structural survey, in these circumstances, might even reveal more horrors lurking under the surface.

I realise it's your dream house but you know what you need to do now.

I agree with everyone - don’t buy it. The asbestos removal would be a nightmare. You will spend so much on structural issues you won’t have any money to decorate the house, and it will be a drain on your finances for years.
Doesn’t sound like the bank will give you a mortgage anyway unless you have lots of savings to carry out the remedial work

Walk away. That's not just thousands, that's tens of thousands. It cost us £10k to sort a damp problem and that was a pretty minor issue where the vendors had already paid for a new damp proof course. Trust me, it's not a dream house, it's a nightmare house.

Honestly, I'd walk away. Those are major issues (especially the subsidence) and the house could end up being completely condemned in a few years if the subsidence is that bad.

If you really can't walk away, then get a proper structural survey (at least to ascertain how severe the subsidence is) and some quotes for repair work, and ask the seller for a big discount based on the amount the repair work is going to cost. Also factor in the 'hidden costs' (someone I know recently had asbestos removed and they had to vacate the property whilst the work was done - thankfully they could stay with family, but you may have to 'live' in a hotel for a week or two if there's no-one you can stay with nearby).

Please, please walk away. This isn't your dream home it's a bloody nightmare.

Give yourself some time to get over it and then start looking again.

I would walk away

Just to be clear, I'm absolutely not thinking about buying it with those issues. We physically can't, the bank are retaining the mortgage until a structural engineer says there are no issues or if there are issues then they need to be rectified.

If we pay for a structural engineer's report and there is movement, asbestos and damp (or just one of them), can we ask the seller to put right at their own cost? We would have to pull out if they don't because of the mortgage retention if it's not put right and we don't have the money up front to pay for the work ourselves. I feel cheeky but it's their house and surely they need to spend the money to make it mortgageable?

Also, I didn't go for the biggest house, the nicest or even the easiest with the least amount of work that needed doing. It needs redecorating from top to bottom, a new kitchen and would benefit from a new bathroom (it's fine just not to our taste). It's just the house that felt perfect when we walked in.

If you can afford it, I would get the full structural survey done. If those things are all wrong with it I would walk away unless the sellers offered a HUGE reduction and I was a cash buyer with spare money for the refurbishment.

I doubt the seller has the money to put it all right either. I expect if owner finds out the issues she will take it to auction or try for cash buyers only

This isn’t a viable purchase. Walk away and forget it.

You could ask the sellers to put it right, but the work required is thousands (possibly tens of thousands) and they may simply not to be able to afford to do the work. They might even be selling the house in the first place because they can't manage or afford the repair costs. It might worth asking the EA how amenable the sellers would be to doing the repair work before you spend several hundred on a structural survey.

Everything the valuer has said is "appears to..." which is why I would get a full survey if i could afford to pay it and then walk away. It would get it straight in my head and clarify it all.

You could ask them to do the work but I'd say it's very unlikely they would do it. No they don't have to make it mortgageable , as a first time buyer I would step away from this. The house would probably be sold at an auction to a developer or builder who needed no mortgage and they would take on something like this.

The question is, what would a full structural engineer's report tell you that you don't already know? It would differ from the mortgage valuation report only in terms of the depth of detail. It would also cost you money. I think you need to ask yourself what you are hoping to achieve by spending more money at this stage on a house with such fundamental problems.

I do this kind of work professionally. Structural renovation, subisdence, asbestos removal - it will cost serious money. Plus you have no idea what else you will find once you start digging. Roof? Lintels? Floor joists?

You will need the purchase price in cash plus enough money to do sufficient refurbishment to obtain a mortgage. It is very hard to remortgage within 6 months so you are looking at having to fund a minimum of 6 months of renovation work. At that point you may be able to persuade a lender to release some money against the refurbed value of the house.

I would walk away, but if you are set on this you need realistic quotes, then add contingency, then add a bit more and possibly some more on top of that. If at that point, you have enough cash, then it is possible, but make no mistake it will be hard, hard work - and if there is a disaster it will wipe everything out and you will be left with a house you cannot sell, cannot mortgage and cannot live in and no money.

I'd strongly advise you to walk away.
We bought our current home as cash buyers but it wasn't the one I wanted, I wanted a large 1930s detached which I'd fallen in love with. Had the survey and it sounds similar to yours, significant progressive movement, dry rot and woodworm, damp, needed a full rewire, etc.
It broke my heart to lose the house but we had to pull out.
We saw a few months later that it had sold at auction for almost half the price we had offered, so a lucky escape.

You'll find another house you love.

Walk away.

The survey is a wake up call, don't spend another penny of your money or second of your time on it.