Hello all, I was hoping that some of you may be able to provide some advice on the following.

I am in the process of buying a house (a 2 bed semi in Sheffield). My offer has been accepted and solicitors are in motion, etc. The house was marketed as a house without problems (full market value £140k), but my cautious side led me to a comission a structural survey. As suspected, the survey revealed that it had suffered from subsidence (or 'differential settlement' to be exact). The report stated that the subsidence has ceased and, although some stabilising work may be sensible (a lateral tie), underpinning is not necessary.

In light of this, I am obviously going to have to negotiate the price before proceding. These negotiations are going to be 3-fold:

1. Firstly, the cost of the stabilising works must be knocked off the purchase price.

2. The cost of my increased insurance premiums for, say, 5 years ish.

and more importantly...

3. The fact that when I come to sell the house in the future, I will have to sell at a reduced price to account for the fact that it has the stigma of subsidence (even though it is historic). So, I obviously want this amount off the purchase price.

So, my question is, how much will the fact that it has a history of subsidence reduce it's re-sale value? 10%?, 20%?, I really do not have a clue, and no-one seems to be prepared to even have a guess.

I realise that this is not an exact science, but if anyone is able to provide some advice/experience on this I would be extremely grateful.

Thanks

A fearful first-time buyer.

p.s. Please note that the house is in a fairly desirable area, if this affects figures at all.

A house is worth as much as you are willing to pay for it.

Subsidence work, once certified rectified, should not affect the resale value of your house or long term insurance premiums.

The only costs, therefore, that you should worry about are the cost of underpinning the house, insurance to cover you during the building work (any structural building work requires special insurance), and possible relocation whilst the work is undertaken.

Ary.

'Differential Settlement' - what does this mean exactly?

Our mortgage company had a mini panic when their valuation report had a tick in the box for 'evidence of subsidence'. What they obviously failed to do was check the description which followed, stating that 'some structural movement had occurred, but has ceased, and was not expected to continue any further'. I spoke to the surveyor in person to check what he had found - he was very particular about the wording he had used in our homebuyers survey, saying that it was not subsidence, simply 'structural movement' which is common in many properties, and doesn't compromise the safety.

Have you checked exactly what they meant by their description?

Thankyou both for responding!

I agree, a house is only worth what someone is willing to pay. But in this instance, it is only worth, to me, the proportion of the full market value that I can sell the property at in the future. However, there doesn't seem to be a 'rule' for this, so I suspect I may just have to see what I can get off the purchase price.

Having said this, I'm sure the vendor has a lower limit, which will no doubt be the determining factor in the end. I was just hoping to support my personal valuation in order to strengthen my negotiating position, because as it stands i'm simply making it up!

With regards to settlement. Settlement is where the land the house is built upon gets compressed, resulting in downward uniform movement of the building. Differential settlement is (so I am told) where the land compresses to varying degrees, causing the house to move downwards by differng amounts at different points of the house. Either way, it is a form of subsidence, which the report does state.

Insurance-wise, I've looked around and none are prepared to do quotes on-line. And of the very few (1% or whatever it is) that even bother with subsidence properties, you have to pay for them to come out and assess the property first. Premiums are at least double what i'd expect to pay normally, so I think it is fair enough to claim at least some of this back.

Anyway, thanks for your posts, I appreciate it. Any other thoughts anyone?!

Sorry I can't be of more help with your questions. However, I will give you a tip with your house insurance:

I know it's not home insurance, but just to paint the picture for you: My boyfriend has a high power car, for which he cannot get online insurance (he has to call the company), so he misses out on the 10-15% savings you frequently get online. However, when he phoned to get his insurance sorted, he asked if they could still do the discount, as it was their logistical problem that stops him from completing online. The company were very amenable and gave him the discount without a problem.

Maybe you could ask about this when you ring for you house inurance quotes?

Re: car insurance.
I got the online discount over the phone because I had already filled in most of the information online but there was not an option to protect your no claims, which I wanted. They were really nice about it as well.

Hi

Our house had evidence of historical settlement (it was built c1910) but the report said that this was not recent and no recent movement had been seen. Every house will suffer from settlement to some degree (even new builds). Some of the doors don't shut properly but the fact that the settlement is historic and no recent movement has been seen does not bother us. We had no problems with the house insurance (no increase in premiums from our previous address) and I don't personally think it would affect the house sale. We read in our survey that the settlement was historic & there is no evidence of recent movement and that was enough for us.

Don't panic ! If I was in your position I would reduce my offer in line with the quotes for any remedial work that needs to be undertaken. I think the vendor would feel that that was fair enough (I know I would) as it would come up on any future surveys for any future purchasers so they would need to cross that bridge at some point. All you can do is ask but I wouldn't want to miss out on the house of my dreams due to something that had happened in the past. Personally, I'd prefer to buy somewhere that had been underpinned if it was in an area of subsidence, that way the work would have already been done to correct the problem.

Get the current owners to do the work under their insurance. In almost all circumstances the current insurer will then be happy to insure you at a reasonable rate. If you want it as a BTL the insurers may have a problem but get the current insurers to do the work anyway. Try Key Connect who are good at dealing with stuff like this on the phone.
The structural engineer will have to provide a certificate of adequacy to the insurers, vendors and yourself.
Your insurance will be about three hubdred quid probably, around a hundred more than a pristine property.
If the vendor does not want to do the work it sounds like the house isn't too bad and you may lose the place if you get too hard ball on them. The vendor may ask the present insurers whether they will continue with the new buyer. It depends how much you want the house and don't be put off by insurers on the phone giving out scare stories.
BTW I once bought a house in an ex-pit village with subsidence and after I'd worried myself stupid the insurers and mortgage didn't bat an eyelid on the basis that all such houses will have major subsidence.

I note that you say in your original post that this is a semi, so any building work you or the vendors arrrange to have done is liable to affect the neighbours directly.

Have you contacted them at all to find out what the situation is with their side? Have they had any remedial work done?

If your lenders are still prepared to give you the mortgage that you applied for and have not queried the value of the house then you should have no problems with resale.

Surprising that the Vendors have not had this work carried out at some time?
Easier to sell a property with a clearance certificate than to try and sell with the underpinning not carried out. Something to hide maybe?

I don't think it will affect the resale price at all. A flat I once owned subsequently suffered subsidence and had to be underpinned. It has since sold twice with no problem and no affect on the price. And since yours does not even require underpinning, even less reason to worry.

Mel, the OP says underpinning is not necessary for this particular property, and the settlement is possibly not particularly noticeable so possibly the owners weren't aware.

A point worth mentioning, as I am sure that many (younger ) Forum Members may not know about, is that Building Regs. on foundation depths and slab composition changed in 1978/9.
Basically and briefly, Foundation depths were increased to take into consideration local soil conditions (many pre-1978 houses had inadequate depth footings). Minimum depth concrete footings were imposed.
Concrete slabs were to be re-inforced with mesh-wire grids etc.
This alteration to the BR was brought in as a direct result of the looooong Hot Summer of 1976 and the previous dry Summer of 1975.
Many hundreds of properties suffered from structural movement as a result of these very dry years.
Any pre- 1978 house is worth double checking on to make sure movement is limited but be prepared for the possible.

quote:

Originally posted by velvet:
Mel, the OP says underpinning is not necessary for this particular property, and the settlement is possibly not particularly noticeable so possibly the owners weren't aware.

Quite possibly velvet....but some householders go to extra-ordinary lengths to cover up subsidence related problems.....seen it first hand!
Don't forget, each and every claim for subsidence issues will cost you a minimum of £1000 from your insurance company.....some people just don't want to pay this.