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?

OP I'd talk to the mortgage valuation surveyor and ask what it might cost in a worst case scenario. And then talk to the estate agent.

It may be that the current owners won't come down and will be hoping for a cash buyer so no mortgage needed.

I'd be wary about asbestos. Settlement is a major job as well.

Damp and asbestos is generally manageable if you want the house and have the money. Neither would make the house unmortgageable. The subsidence is the serious issue. Have you spoken to the sellers? It sounds like it’s so significant that they must be aware of it. You need to find out what they know and whether there’s any possibility for having work partially covered by their insurance.

Is this just a mortgage valuation survey or have you paid for your own survey? If it’s possible, call your surveyor.

I’d then ask the vendors to pay for a full structural survey. They’re going to need to know or their house will be unsaleable.

Unless a structural survey comes back with everything okay you won't be able to proceed so it'll be money down the drain. Find somewhere else to buy or pull out of this one and see what happens - it'll need a cash buyer from the sound of things.

I thibk you would be bonkers to pay for a structural survey at this point, sounds like it will just be money down the drain.

Subsidence can be fixed under present owners insurance. Then buyer takes over same insurance in case of future problems. Asbestos etc can be fixed, I would have a problem with damp but it can be treated.
You would have to make an offer, ask owners to fix up, then get survey. Or make such a low offer (they will refuse) in order to afford the work.

Op, even if you get the work done, movement makes the house uninsurable with any company other than the one the vendor already uses. You won't be able to get buildings insurance cheaply, even with the same company, because of its history.

Do the vendors know just how bad this house is?

Don't walk away; run. There will be another house for you somewhere.

Never been in a position to buy a house but, as others have said, walk away OP. I would walk away.

can we ask the seller to put right at their own cost?

Well technically you can ask anything, but they will say no. Lots of people don't need a mortgage so not being mortgageable isn't in itself a problem.

Run away. You'll find somewhere else.

If you do go down the route of a full structural survey, get a firm that deals with historic buildings. Modern surveys often diagnose damp etc but old buildings work differently.

But if there is subsidence that's a massive deal.

Be cautious.

I doubt the vendors will fix anything, that's the reason why it is so cheap!

I assume you are not buying this through an estate agent, OP? Normally they would tell you if a property was not mortgagable.

We bought a house which we knew needed taking back to brick and starting again. We did some structural work, full rewire, all new plumbing, kitchen, bathrooms, flooring etc. It cost about 40% of the cost of the house again AND even then the mortgage valuation was nowhere near as bad as yours.

Often mortgage lenders do not use qualified surveyors for their valuations and they only have a brief look for anything obvious to protect the lender. Our mortgage valuation completely missed a number of fairly major issues which we knew were there as our surveyor had already found them. A structural survey will likely be much worse than the valuation. I don't think you will have a choice but to walk away sadly. I doubt the property is mortgageable.

I know this sounds trite but in a few years you will look back and be so grateful you didn't buy it. We lost out on a house that like you I had envisaged my whole future in. We lost it due to a chain collapse and for months I couldn't even drive past it. I am now so glad we didn't buy it as I've had time to think about all it's faults and negatives. It wasn't my dream house at all.

I would walk away unless you are experienced in major property renovations and structural work, with the cash to bankroll it.

Echoing everyone else - the property is unmortgageable. Unless you are cash buyers with a sizeable chunk on top to afford the repairs and refurbishment, you can't buy it.

The owners will need to sell to a cash buyer or developer.

Run.

You could get a structural survey but it's not going to magically make it mortgageable unfortunately. You'll just waste the best part of £1k on a survey, ask the vendors to put it right, they won't be able to afford to and you'll be back to where you are now.

You head has to rule your heart. Let it go, move on.

These boots are made of walking (away).

*for walking

You've said yourself that you have no choice - your mortgage company will not lend on the house, unless these things are fixed.

So all you can do, is go back to the vendor, tell them that their house is unmortgagable (helpfully the valuer has provided the evidence for you: "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"") and say if they will do the work to bring it up to a standard that will satisfy the building society to lend, you are interested, but if they can't/won't, then you are unable to proceed.

If it wasnt being sold as unmortgageable then there is a very high likelihood that your offer is way above what it is actually worth now these problems have been highlighted.
Run away as fast as you can. And in my experience it is highly likely that the owners will not have the money to fix these things if they have let it get in that state already

It sounds like a demolition and re-build is in order. Where I live almost every house is knocked down and rebuilt into a different style and they are not anywhere near as bad as that one, it is just the fashion here.

Hang on
If your mortgage company says this, presumably every mortgage company will say it, which means they're going to have to wait for a cash buyer.
Do they know it's so bad?
Just tell them and ask them if they are willing to do the work.
That could be their only option if they want to sell the house.
Where is the asbestos if the house is 1850?

Thanks for all your advice! I feel like I've detached myself from the property and have told the estate agent that if the full structural survey confirms there are problems then the sellers either need to put it right or reduce the asking price or we we'll be walking away. Of course if there is a major movement problem we'll definitely be walking away without a second thought.

I don't mind if smaller problems are picked up, we're not buying it to sell and make a profit in a few years, we just want to make it our much needed forever home after 10 years of moving around in military accommodation.

I've been looking at the house pictures on rightmove and I really don't know what they saw to say there was evidence of progressive movement in the rear addition. There are no visible cracks internally in the bit mentioned, I cant remember seeing any outside and I did look thoroughly on both visits. I mean, I know I'm no expert but surely I would have seen something or can see something in the pictures.

The survey makes it out to be like a right dump but it's really not which is why we're going to give it a chance and pay for a full structural survey - we don't want to turn this down on a maybe. If you want to look for yourself on Rightmove, it's a white detached 3 bed cottage in Shrewton under offer for 275k.

I personally would not pay for another survey
They won't do the work
They will put it back on and keep their fingers crossed the next lot just get a valuation