Selling a house with subsidence is not a straightforward process.
Buyers might find it undesirable and lenders can be reluctant to offer a mortgage on it.
So, how you can sell a house with subsidence? Will it affect the value of the home? And how much it might it cost to rectify subsidence?
Read on to find out.
What is subsidence?
Subsidence is the name for vertical movement of earth (/soil).
In the context of property, it causes houses to sink into the ground and, therefore, become unstable, which is a potential risk in the future.
Subsidence is often caused by long periods of dry weather, meaning no moisture is in the ground. It may also be caused by trees and shrubs that have absorbed large volumes of water from the soil.
You will find that subsidence is more common in some areas than others, depending on the land and soil conditions.
For example, in London, many properties have historically been built on ‘London clay’, which has caused occasional subsidence issues over the decades.
What are the signs of subsidence?
Selling a house with subsidence is not easy, so you need to look out for the signs.
Firstly, cracks in walls or ceilings are common symptoms, as are sinkings floors, and windows or doors sticking.
If there is noticeable leaning of the property, then you should be wary of this.
Likewise, if pre-existing cracks are expanding, or wallpaper is crinkling as the wall and ceiling joins, these may also indicate subsidence.
In many cases, subsidence cracks will be larger than 3 millimetres and may also be diagonal. Not all cracks in your property are a sign of subsidence, though, so you should get a qualified expert to inspect them.
A structural engineer can visit your house, complete a survey to investigate subsidence and provide you with a report on the situation.
You should research experts in your area who provide this service and then contact them for a quote.
Does subsidence devalue a house?
Yes, if your house has subsidence, it will devalue the property.
Even if it isn’t creating a major issue in the present, it may still need to be dealt with further down the line, and this impending expense will make your home less valuable.
According to some calculations, subsidence can devalue your property by anywhere from 5% to 25%. The exact amount depends on a few factors, including:
- The severity of the situation
- Whether there is clear guidance on the condition
- Whether steps have been taken to fix it
What is historical subsidence?
Historical subsidence refers to subsidence that was identified many years ago and rectified at the time. The problem may have yet to arise again.
When you are considering buying a house with historical subsidence, or are trying to sell it, you should speak to a mortgage lender.
The bank may offer or refuse a mortgage depending on whether a full report is available and how long it has been since the problems occurred.
If you can demonstrate that subsidence has not occurred for a very long time and that mitigating steps were successful, then your property should not be devalued to as great an extent.
The specific conditions and lenders/buyers you work with will all affect the outcome.
You need to inform a potential buyer that the house has historical subsidence, if you are aware of it. Otherwise, you could be subject to legal action further down the line.
What is underpinning, and should I do it?
Underpinning is the word used for strengthening the foundations of a property. This is commonly done when subsidence has occurred, and the house is not a stable place to live in the long term.
Several sources indicate that underpinning could devalue your property by up to 25%.
This is because it demonstrates that there is/was a subsidence problem. Furthermore, underpinning may be required again in the future, creating a sizeable cost for the new owners.
That said, when the underpinning has been done well, potential buyers may view it more favourably than a house that has not undergone the same work.
Some lenders will still offer mortgages on a house that has been underpinned, as long as:
- the work has been done to a satisfactorily high standard
- no issues have reoccurred
- there is a detailed report on all work completed and the current condition
Other banks may view this as a risk, though, and as part of their policy, they avoid underpinned houses. You may need to shop around to find a willing lender.
How much does underpinning cost?
As you would expect, the cost of underpinning depends on the severity of the situation.
According to Checkatrade, the average cost of underpinning per square metre is between £1,500 and £2,600. The average tends to be around £1,800 per square meter.
You should ideally get more than one quotation on the project.
After all, it is a major financial commitment that will have enormous ramifications on the selling price of your property. And it will impact your buyers’ ability to get a mortgage.
Is subsidence covered by home insurance?
Most Home Insurance policies cover subsidence as long as the property has no history of subsidence in the past.
However, if there is a history of subsidence, Home Insurance may not cover this, or the payment terms will be vastly different.
You may also have difficulty getting standard home insurance, in which case you’ll need to look for a specialist provider.
According to Compare The Market, if you make a subsidence claim, you will have to pay a higher excess in the future. You will also be subject to a higher excess if a claim has been made in the past.
Can I sell a house with subsidence?
Selling a house with subsidence will take a lot of work.
Whether underpinning has been carried out and how bad the subsidence is will impact whether buyers can get a mortgage on your home.
The property market conditions may also impact how much it devalues your house.
If you can’t get a mortgage on your home, you may need to find another way to sell it.
Popular methods include selling to a cash house-buying company or offloading the property at auction.
Both of these methods may compromise your selling price, but they will still enable you to get rid of it and, therefore, avoid the hassle and expense of a home with subsidence.
Some lenders specialise in making offers on houses with subsidence, and getting Buildings Insurance on a property with subsidence is possible with some specialist lenders, too.
You should search the entire market to find out what’s possible, and then make an informed decision based on your financial and emotional preferences.
