While buying a house with subsidence could enable you to snap up a bargain, it comes with many associated risks which shouldn’t be taken lightly.
In this guide, we’ll take a look at buying a home with subsidence, how to spot signs of it, and what steps you can take as a buyer to ensure the home doesn’t pose any issues for you in the future.
If you’re looking for your next home, contact your local Whitegates branch for expert advice and guidance.
What is subsidence?
Subsidence occurs when the ground beneath a building begins to sink downwards. When this happens, the foundations of the property are no longer supported by the ground beneath, causing the walls and floors to shift and crack.
If left untreated, subsidence puts a home at serious risk of severe structural issues.
What causes subsidence?
Subsidence is often a result of the ground losing moisture, causing it to shrink in dry spells and expand during wet weather. This movement can make the ground unstable, causing the foundations of the property to shift.
Tree roots can also cause subsidence, as trees planted close to the home can leech moisture from the ground during dry spells, causing the soil to dry up and shrink.
The most preventable cause is water leaks and burst pipes, which can dilute and soften the soil beneath the house’s foundations.
Related: Top tips for safeguarding your property from damp
Should I buy a home with subsidence?
You could secure a home at a bargain price if subsidence is present, but there are a number of factors to consider.
Ongoing vs historic subsidence
Subsidence can be categorised into either ‘ongoing’ or ‘historic’. Knowing the difference between the two is extremely important if you’re planning on buying a house with subsidence, as each poses very different challenges.
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Ongoing subsidence means that the ground is currently moving and causing issues which will be ongoing unless remedial work is carried out.
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Historic subsidence means that the home once had subsidence but it has since been repaired and has not recurred.
If the home falls under the ‘historic subsidence’ category, then it is structurally sound and has been signed off by a structural engineer. Therefore, buying a home with historic subsidence will present less challenges than one with ongoing subsidence.
Obtaining a Structural Engineer’s Report
If you’re considering buying a home with subsidence, it’s essential to appoint a structural engineer to visit the property and carry out an inspection. This will identify whether the issues are historic or ongoing, or if they indicate more serious structural problems.
The report will also provide you with recommended actions to remedy the subsidence issues, as well as an estimate of the costs of repairs.
Related: No Buildings Regulations Certificate? Here’s what you can do
Getting a mortgage on a home with subsidence
Most mortgage lenders will not offer a loan for a house with ongoing subsidence as it poses too big of a risk. Unless the problem is resolved, subsidence can cause serious structural damage that could make the property uninhabitable or in dire need of extensive repairs, thus lowering its market value as time goes on.
You could take out a bridging loan to purchase the property if it has a severe subsidence issue, then you can rectify the subsidence before getting a mortgage deal.
A bridging loan enables buyers to take out specialist buildings insurance on the property with subsidence until the remedial work is complete. However, the interest rates on bridging loans can be much higher than your average mortgage, so you’ll need to factor this into your monthly budget.
If subsidence has been remedied and classified as historic, then you should be able to get a mortgage on the property as the lender can instruct a surveyor to make sure that the problem has been resolved as part of your mortgage application.
If you’re interested in buying a property with subsidence, make sure to speak with a financial adviser to find out which options are available.
Related: Should I use a mortgage broker?
Should I buy a house with subsidence?
You should ask yourself whether buying a house with subsidence is truly a viable option for you before committing to anything. While a lower upfront cost might seem tempting, it’s important to consider the following:
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How serious is the case and is it easily fixable?
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Are you willing to carry out the repair work once you’ve moved in?
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Will the cost of repairing the home offset any savings made from the lower asking price?
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Will you be able to sell the house easily once the problems are resolved?
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Could you purchase the home outright with no mortgage?
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Will you be able to obtain a mortgage once the repairs have been completed?
Buying a home with ongoing subsidence
Buying a house with ongoing subsidence is not ideal for most people. But in some cases, the cost of buying the home might be significantly lower than the cost of repairs, making it a good investment for cash buyers.
However, remedial work for subsidence is no easy feat, and can often take over a year for the issue to be resolved.
If you have the time and money to put into a house with ongoing subsidence, you could make a healthy return on your investment by flipping it into a rental property, or carrying out enough work to increase its market value.
Related: Top tips for planning your finances before you move
Buying a home with historic subsidence
If you discover that your dream home has a history of subsidence, you shouldn’t let this put you off. It could be worth noting that the house has clearly undergone inspection before, and repair work has been done to the property to ensure that it is structurally sound.
However, it is important to do your due diligence and find out just how serious the case of subsidence was, and the extent of the repairs carried out. This will provide you with a clearer picture as to whether there’s any potential for recurring problems, or if the issue has been thoroughly resolved.
The extent of the problem and its repairs may also impact your insurance premiums and terms, so it’s important to have all the facts before committing to buying a house with historic subsidence.
Are you ready to start your next moving journey? Contact your local Whitegates branch today
