Purchasing a home is one of the most significant investments most people make in their lifetime.
But what happens when the property you’ve set your eyes on has had its foundations underpinned?
While an underpinned house might initially raise red flags due to its history of subsidence, it doesn’t necessarily mean it’s unattainable. With the right guidance and understanding, you can navigate the complexities of securing a mortgage for an underpinned property.
In the following sections we explain why a house would need to be underpinned, the signs to look out for, how to get a mortgage and more.
What does underpinning mean?
Underpinning is a remedy for subsidence, when the foundations of a house move because the ground underneath is unable to support it adequately.
Underpinning strengthens, or reinforces, a building’s foundations, making it more secure.
It requires specialist equipment and engineers, who will decide on the best way of supporting the house.
One traditional method involves excavating sections and then filling the void with concrete.
Why would a house need underpinning?
A house needs underpinning when it has suffered from subsidence.
Subsidence occurs when the ground beneath your foundations sinks unevenly, causing parts of the property to move. This will cause cracks to appear, both inside and outside.
If left unchecked, subsidence can devalue a property and ultimately leave it uninhabitable due to an unsafe structure. In this state you would not be able to get a mortgage approved.
It isn’t always obvious that a property needs underpinning, or in fact that it definitely has subsidence. If you are concerned you should seek advice initially from a Chartered Surveyor.
What is Subsidence?
Subsidence is where a property’s foundations sink due to shifts in the underlying soil.
This can be influenced by the type of soil, especially in areas with clay which is prone to moisture changes. Contributing factors include tree roots extracting soil moisture, leakages from drains, historical mining activities, and natural erosion.
Subsidence in a property can be identified by signs such as sudden, diagonal cracks in walls, especially around windows and doors; doors and windows that stick; sloping floors; ripples in wallpaper; expanding cracks in external brickwork; gaps forming around window and door frames; and leaning walls.
Early detection and action can prevent extensive damage and high repair costs. If there are concerns about potential subsidence, it’s imperative to seek an assessment from a Chartered Surveyor to determine the best course of action.
How does this affect the mortgage?
Mortgages are available on properties with a history of subsidence and underpinning.
The range of lenders will depend on the severity of the subsidence, the type of underpinning used and how long ago this occurred.
Getting a competitive mortgage should be fairly straightforward if the subsidence or structural issues have been dealt with and the underpinning is of a high standard.
You should be prepared for the lender to ask for lots of information, and possibly commission a specialist survey.
They will want to know:
How long ago
How long ago was the subsidence? They will be more concerned if the issues occurred fairly recently.
Many lenders won’t be to concerned if the underpinning happened 10-15 years ago and there have been no problems since.
How severe
How severe was the subsidence? The severity of subsidence can vary greatly and will be affected by the sub-soil.
If the remedial work was carried out to a high standard, how bad the subsidence was should have less of an impact.
The type of underpinning
What type of underpinning was used? There are different ways of treating subsidence and certain methods are more reliable than others.
Seller’s obligations
Subsidence, or underpinning, must always be declared by the seller (vendor) or estate agent at the outset.
It will also reduce the value of the house by 20-25%, even after the underpinning.
Is it OK to buy an underpinned house?
All properties will have issues of one kind or another.
Subsidence is a serious problem. But underpinning is now a tried and tested solution for subsidence.
There is also a point of view that underpinned properties are actually more structurally stable than those homes that have not had the treatment.
That said, if you are interested in buying a property that has a history of subsidence you should always get a full structural survey done.
Does underpinning devalue a property?
Underpinning could devalue a property by around 20-25%.
The severity and how recently it occurred may also influence the value even further. But if the underpinning happened some time ago and there’s been no further issues, then the price impact could be minimal.
If you are comfortable living in a property that has been reinforced because of past subsidence, then the lower price point will be to your advantage. But don’t forget that when you come to sell, the issue of subsidence has to be disclosed, and may still cause a slight reduction in your homes value.
How long does the work take?
To underpin a house takes around 4-6 weeks. The time will depend on the size of the property, and the problem, and the method of underpinning.
How long does it last?
The remedial works contractor should provide a 10 year guarantee against defects. But underpinning is likely to last for the building’s natural life, as long as the work was carried out correctly.
Can you get a mortgage on a house that has subsidence?
No, traditional lenders will not grant a mortgage on a house that is currently suffering with subsidence.
Subsidence can cause serious damage to a property, which could ultimately cause the building to collapse, without proper treatment.
If the house is badly damaged, and perhaps deemed unsafe to live in, then it becomes uninhabitable.
To purchase a property that requires underpinning you will need the help of a bridging lender. Bridging loans are designed for this type of scenario.
You will be able to borrow a certain amount to assist with the initial purchase. Then you can proceed with the underpinning.
When complete a fully signed off, you would apply for a standard remortgage, which then pays off the bridging loan.
You will find more useful information in our article: Buying a House With Subsidence
Watch out for the six month rule!
If you buy, fix and remortgage within six months of purchasing any property you could be caught out by the mythical ‘six month mortgage rule’. (That isn’t really a rule)
The solution to this is a day one remortgage lender, but this situation will reduce the number of lenders available to you.
You will find more useful information in our guide: “Day One Remortgages Explained“
How can a mortgage broker help?
You might be wondering about the challenges that come with securing a mortgage for an underpinned property.
An underpinned house can be viewed as a higher risk by many lenders due to its history of subsidence. This is where a qualified mortgage broker can be invaluable.
Firstly, an independent mortgage broker has a deep understanding of the lending criteria and preferences of various banks and building societies. They’ll have the inside track on which lenders are more open to considering applications for underpinned properties.
Some lenders even specialise in non-standard or high-risk properties, and your broker will know exactly who to approach on your behalf.
One of the key challenges is providing the right documentation.
Your broker will guide you on what’s needed. Typically, this includes a report from a structural engineer confirming the stability of the property, detailed information about the underpinning work, and any associated guarantees.
Negotiating with lenders can be complex, especially when it comes to properties with a history of subsidence. Having a broker to present your case, highlighting the home’s stability and other positive factors, can make a significant difference.
Your mortgage broker will also streamline the application process for you.
They’ll ensure it’s complete, well-presented, and stands the best chance of approval. They’ll handle most of the communication with the lender, saving you a lot of time and potential stress.
Plus, they’ll keep you informed and provide guidance every step of the way.
Ready to explore your options?
If you’re just about to start your mortgage journey and could use the guiding hand of a professional, don’t hesitate to reach out to a reputable mortgage broker.
An independent mortgage broker can access over 100 lenders on your behalf. They will make the process smoother and more profitable than going it alone.
Keep reading, keep asking questions. The more you know, the better decisions you can make.
