Problems with subsidence in the area? / Banks withholding mortgage loans

[tinkerbell]

Hi I am having trouble shifting my flat because my buyer's bank are trying to prove there is subsidence. I have to pay for a survey to my own property next week to investigate a couple of cracks etc and wondered if anyone else had had any problems of this nature? I had a full survey done here when i moved in 5 years ago and the report said chances of subsidence were 'extremely remote'. My gut feeling is this is the banks being over cautious about lending (a first time buyer) money - they seem to be leaving no stone unturned with wanting second surveys, opinions etc which I have to pay for. I am worried that even if the survey comes back and says there is none at the moment but there COULD be in the future (as I also hear that surveyors are being very cautious and sitting on the fence with wording these days), that this will stop the bank lending the buyer the money. Just wondered if any one else had experienced anything similar recently as i have an agonising week to wait before the second survey.

[tiger ranks]

not asking for your full address but what road do you live on

[Penguin68]

I had a full survey done here when i moved in 5 years ago and the report said chances of subsidence were 'extremely remote'.

If you can, get the same surveyer back again - he/she would then be able to confirm 'no change' (if there hasn't been any) over the last 5 years.

As a general piece of advice, if you buy a property which does have cracks in it (most do) take a dated photograph of the cracks, preferably with a ruler next to them, when you buy the property which might then act as reassurance (assuming the cracks haven't openened further) when eventually selling.

The ED area (parts at least) is known as having subsidence potential as it is hilly and on clay. Most insurers mark much of it (too much, in my opinion) as being at risk. However, there also has certainly been some work done to repair subsidence damage throughout the area, so it isn't a complete case of crying wolf.

Cracks can occur when large trees are removed (alters the local water table) - and can certainly be caused in garden walls by heavy lorries jumping over traffic calming humps.

[pearcesa]

I think the surveyor who is acting on behalf of your prospective buyer is just being over cautious/over zealous.

Have you spoken with your estate agent to see if they can act as a go-between and help out at all?

Alternatively, you could speak to your buyer directly and reassure them that there is no subsidence and perhaps pay their related costs to go with another lender. I believe that some lenders/surveyors are more stringent than others.

If you need a good independent surveyor, I can recommend one.

Cheers.

[Ramble66]

As far as I'm aware as long as your building insurer are willing to transfer to the new buyer there shouldn't be a problem with the mortgage. We bought a flat with previous subsidence and as long as we could get insurance the mortgage company were happy.

[new mother]

the agent is no doubt desperately keen for it to go ahead so I'd get him/her on side.

Ditto the surveryor who did your survey - good idea to get him/her back.

lastly and not wishing toyimpugn the motives of your buyer, have you actually seen the lender's letter or is he/she just reporting it all?

[pearcesa]

new mother Wrote:

-------------------------------------------------------

> the agent is no doubt desperately keen for it to

> go ahead so I'd get him/her on side.

>

> Ditto the surveryor who did your survey - good

> idea to get him/her back.

>

> lastly and not wishing toyimpugn the motives of

> your buyer, have you actually seen the lender's

> letter or is he/she just reporting it all?

Very good points 'new mother', especially the last point. We had something similar happen to us when we were trying to sell, a girl came round wanting to buy the flat, she said that the outcome of her survey was that the bank had concerns over lending the money as the property had had subsidence. We submitted all the paperwork to show everything was fine (another flat in the block sold two months prior), but then she came back with that she couldn't get the full amount & it turned out she was a time waster.

I would strongly urge you to get the agent to set up a meeting between the three of you so that you can see all the materials from the surveyor yourself....

[tomk]

I wouldn't pay for a survey on my own property - this is your buyer's responsibility. I would either put it back on the market and await a serious buyer, or - if desperate - offer to reimburse buyer the cost of the second survey on exchange of contracts.

[Penguin68]

Your agent (assuming you have one and aren't selling privately) should be able to advise you whether this concern is normal for your location or whether it seems strange. It may be that your buyer is looking for a large %age mortgage and the risk to the bank is thus greater if lending. This could also be part of a negotiation ploy to get you to drop the price.

[Timster]

The only reason the bank wouldn't loan your buyers the money would be if the surveyor had valued it at less than the price they were paying. It will be a condition of the mortgage that the buyer has taken out buildings insurance which will cover subsidence and mean there is no risk to the bank.

This sounds like a delaying or negotiating tactic and I agree you certainly shouldn't pay for your own survey.

[FluffyGalore]

I live near East Dulwich station and have subsidence. Claim, monitoring and site inspections going on now. When I bought my flat a few years back the surveyor picked up on some cracks but didn't say specifically it was subsidence so the mortgage went through.

My current surveyor said it is due to the rather large trees in front of and at the back of my place which I am sure we are going to have fun and games getting the council to remove.

The cracks close in winter and open up in summer by up to 4mm (not that bad apparently but looks horrible and causes doors to jam and locks to become tough).

My surveyor said there has been an increase in the number of subsidence claims he's been dealing with in East Dulwich, but they have been caused by large trees which have not been properly maintained by the council. Perhaps your buyer's bank has access to subsidence claim info hence they are being difficult (wish mine had been more difficult so I wouldn't have had to deal with this!!)

[Sue]

I had an insurance claim for subsidence some years ago, which apparently was due to faulty drains which have now been fixed - but I have to stay with my original insurance company (who have hoicked up the premiums) because when I try to get other quotes, they always ask has there ever been subsidence, and as soon as I say yes, end of conversation.

The fact that the cause of the subsidence has supposedly been fixed is neither here nor there for them :-S

Re the trees, I have read that removing trees can sometimes cause even more problems.

[Twirly]

I believe that Sue is right re. removal of the trees making things worse. Some neighbours of mine had the council cut back a tree outside their property to reduce the amount of water it was consuming and therefore stop the subsidence that was threatening. Removal of the tree can mean that the ground becomes waterlogged instead.

Which ties in with FluffyGalore's problem with the council not managing the trees properly.

[tinkerbell]

thanks everyone - so much food for thought - I am on Bromar Road to answer somebody's question! I feel much better equipped to deal with this now. God - thank god for the east dulwich forum - so much sense spoken here. I wish I had thought about them paying for the survey and me reiumbursing them on exchange, what a good idea. You live and learn.

[seanmlow]

I remember selling a house once and apparently there was subsidence due to a tree (that was later removed). The buyers ran a mile as the insurance company would not touch it. However, a new buyer offered on it, found an new insurer and the bank was happy :-).

I think it is really dependant on the lender to be honest.

Do NOT pay for a survey on the buyer's behalf as this is their responsibility. If this is the later stages of a deal then I agree with Penguin68 that this could be a tactic for a reduction. My advice would be stand strong, as a buyer will come along prepared to 'take a view' on it. Afterall, I think all houses/flat in the area have some historical movement to be honest!

[Penguin68]

I am not convinced that the USA experience, as evidenced in the link, is directly applicable to the UK - the history of 'bad' mortgage loan decisions by US lenders is very different, in the main, although some UK lenders did start to copy-cat. The UK government never, unlike the US government, virtually mandated toxic loans to encourage house ownership amongst the economically disadvantaged.