The Survey says the property has subsidence, what to do?
So you got an offer accepted, paid for the survey and the surveyor has come back and told you the property has subsidence or as some people call it, 'The S word'. Time to panic and withdraw? No, keep your cool. There is far more to this than meets the eye.
I'll explain what such the surveyor means, what you need to do next and how it'll tell you if there is anything to worry about.
First off, there isn't definitely subsidence
Read the surveyors report again and you'll see something like he or she "suspects subsidence" or "recommends subsidence is investigating". The surveyor will never say there is subsidence because they are not qualified to do so.
A different surveyor could visit the property tomorrow and not mention subsidence once. At this point the idea that the house or block has subsidence is simply a matter of opinion.
The next question is how strong that opinion is. If the surveyor you instructed is acting on behalf of a lender because your getting a mortgage the key will be in the surveyors valuation. If he values the property at the price you offered or above then his concern for the subsidence is very small because he is still saying the property is worth what your paying.
If the surveyors report says no money should be lent until the question of subsidence is resolved then he is pretty concerned.
Just to be specific on this. Even a surveyor doing a valuation survey will report subsidence if they think it exists to the point where it is affecting the value of the property. So don't think you need to get a structural survey to get a subsidence green light.
That just makes sense. Subsidence can affect the value of the property so a valuation survey must report it if it is there.
What to do if the survey suggests subsidence
To put the matter to bed one way or the other you are going to need a structural engineer, not a structural surveyor, and that's going to cost a few hundred pounds depending on the size of the property.
How to find a structural engineer
I'll normally approach the insurance company that the seller is currently using and ask them for a recommendation for someone local. Local is important because they will be better at pin pointing the cause which I'll talk about later. They'll be familiar with the soil and have seen a number of other properties in the area that are, or are suspected of, subsiding.
Who pays for the structural engineer?
This is a bit more tricky. You think the house has an issue so the seller should pay for it and the seller thinks your surveyor is the one who bought up the issue so you should pay for it.
My approach is this. As long as the sellers building insurance overs subsidence then I pay for the structural engineer but the seller agrees to buy the report off me if there really is subsidence. They'll need the report anyway to forward to their insurance company in the case of actual subsidence so they're going to have to pay someone.
Understanding what the structural engineer says
For this you need to understand types of subsidence.
- Settling - not really subsidence, the property has just sunk a bit, kind of like Venice! This is very common in new builds and causes some cracking of internal plaster but nothing more serious.
- Sinking but stopped - again not really subsidence, the property as a whole may have just moved down a little. The south of London is a prime area where this can happen. Before it was the south of London it was marsh and swamp. The soil is pretty soft and even a property that has been around for over 100 years can still move down a little now and then!
- Up and down - This is common in places like north London where a lot of the soil is clay based. In wet winters the clay expands pushing properties up. In the hot summer the soil dries and contracts and properties move down again.
You see all of the above will cause cracking inside and outside of a property but only the last one is an issue. This is specifically when only one part of the building is on the move. So say the front of a house is moving down but the rear doesn't want to go anywhere.
What's causing the subsidence
The structural engineer may also suggest why he thinks the subsidence is happening. A collapsed mine, vibration from a train tunnel, etc.
One of the most common causes is trees that have grown too big. Someone planted a sapling in their back garden close to the house and let it grow into an enormous tree. The roots are sucking water out of the ground big time at the rear of the property causing the back wall to sink.
Or on tree lined streets. It all looks very pretty but if they grow too large they'll start sucking too much water from underneath the front of the buildings and they'll start to subside in that direction. Its a real issue because when councils are considering how to reduce their budgets a decision to lop trees less often isn't an immediate vote loser whereas less money for schools is.
If you are buying on a tree lined street where one of the trees is bang outside the house you want to purchase it is well worth talking to the local authority about what their current program is for managing the greenery.
What is the structural engineer actually saying?
Now even if that is the case the structural engineer will come to one of three conclusions:
- One: The subsidence happened but it has stopped
- Two: The subsidence is happening right now
- Three: I'm not sure
So just to be clear even if the surveyor says he expects subsidence it is still possible for the property to have subsided and to now be perfectly fine. Go check out some of the flats on Leith Walk in Edinburgh. Half the doors inside close by themselves and half swing open if you don't close them properly because at some point in the past the old blocks listed slightly and then stopped.
You only have an issue to consider if there is subsidence happening right now or if the structural engineer isn't sure.
Now you can start using 'the S word'. Now you know there is actually an issue.
Then you have two choices. Fix the problem that's causing the subsidence or fix the subsidence. What I mean by that is if you remember I was talking about trees being a possible cause. If the structural engineer believes this to be the case and the tree can be removed then this will stop the subsidence.
Otherwise if the property is subsiding the seller will need to check that their insurance covers it and then its up to you if you want to continue or renegotiate because after you move in someone is going to have to do some digging underneath and put in some better foundations. A process known as 'Underpinning'.
Is the property insured?
Basically as long as the subsidence is covered by insurance and your lender is OK to go ahead with the mortgage because its all covered then its not a question of cost but a question of who is going to be in the property while all the building work is going on and if you can renegotiate because of that then all well and good.
Don't assume you can though. The seller might be buying something themselves and a price change will make their plans impossible so they may instead prefer to pull out until the underpinning is done. A good estate agent will try and manage this upward chain - perhaps renegotiate the sellers deal so that everything works even if you're offering slightly less ... but good estate agents are few and far between.
If the structural engineer is not sure they usually recommend placing glass rods in specific places around the building. They'll then go back 6 to 12 months later and see if any of the glass rods broke which would suggest active movement.
In this case its a balance of risks. If the lender is ready to go ahead because there is an insurance policy in place that will cover underpinning if it is necessary then its your call and the same renegotiating points I've just made also apply.
One important point here. If you are buying a period property, say more than 100 years old, that could at some stage have subsidence - and properties can sit around for decades with no issues before suddenly starting to subside - keep the same insurance policy that the seller had. This is not a place to be shopping around because if you switch and subsidence occurs the insurance companies will usually get into an endless argument over when exactly it started and so who exactly should pay for the underpinning.
I've seen surveyors say they suspect subsidence, a structural engineer go round to the house, spend 5 minutes there and say "No, you're fine". Costs hundreds of pounds for that 5 minutes but you did get a highly qualified engineer out of bed.
I've seen buyers pull out of purchases because their surveyor suspected subsidence and then the property being sold to someone else whose surveyor never mentioned a thing about subsidence so don't let your surveyor get in the way of a purchase.
For way more detail see Chapter 20 of How to Really Buy a Property: What A Property Survey Really Means.