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By Pete Mugleston | Mortgage Advisor

Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 4th December 2020*

Customers frequently contact us with queries about buying a property with subsidence (or a history of subsidence), and specifically, how this common yet serious structural problem could affect their chances of getting a mortgage.

If you’re in the process of buying a house with subsidence you may already have found it difficult to secure a mortgage deal you’re happy with, or you may even have been declined for a mortgage, but the good news is there are plenty of options for buyers in this situation.

The specialist advisors we work with have a lot of experience in this area and are used to helping customers overcome this frustrating issue. For the right advice in your circumstances, feel free to call us on 0808 189 2301 or make an enquiry online.

In this article we will explore:

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What is subsidence?

“Subsidence” is the term used to describe what happens when the ground underneath a house starts to sink or cave in, resulting in some part of the property itself starting to sink. This causes damage to the foundations and is often identified by visible cracks on the inside or outside of the building. If left untreated, it can cause a building to visibly lean to one side, and to become structurally unsound.

Subsidence is relatively common in older properties, but it can have severe consequences if it’s not properly addressed. This is why it is harder to insure a property with subsidence or a history of it, and why some mortgage companies will give them a wide berth.

Buildings more susceptible to subsidence are typically those built on old mining grounds and landfill sites. Very large trees close to the property walls can cause issues also when the roots reach the foundations.

If you’re thinking about buying a property with a history of subsidence, there are therefore a number of considerations to bear in mind above and beyond the usual factors that can affect the process of taking out a mortgage.

Can I get a mortgage on a house with subsidence?

Properties with a history of subsidence can certainly be acceptable to mortgage lenders, and with a bit of guidance from an experienced advisor, you should be able to find a willing lender.

However, you must first establish what has been done to address the problem when applying for a mortgage on a subsidence property, as lenders will want to be reassured that it won’t reoccur, risking a potentially huge drop in resale value.

Subsidence and mortgages: underpinning

More common in the old days, but today, only a small percentage of buildings that suffer from subsidence require underpinning. This is a last resort because it is expensive to get done and would require you vacating the property for weeks or even months.

More often than not, the cause whether this such as nearby vegetation or water pipes for example are removed or fixed. The ground then recovers and repairs itself, so to speak. Work is then done to repair any cosmetic damage such as cracks in the walls.

Your seller should be able to confirm whether underpinning has been done, and as long as you can prove that this work has been carried out to an acceptable standard, it should absolutely be possible to obtain a mortgage on the property. We recommend speaking to an expert for the best advice, as they can point you towards lenders with a good track record in subsidence mortgage lending, potentially saving you a lot of time.

You’ll usually need to instruct a surveyor to carry out a full structural survey, possibly with additional subsidence checks, which can be a costly process – so it makes sense to bear this in mind when negotiating the purchase price.

Subsidence insurance and mortgages

Another complication of subsidence when buying a house is the headaches it can cause with insurance. No mortgage company will lend on a property without buildings insurance in place, so you will also need to find a suitable insurer before you can close the deal with your seller.

Depending on the severity of the subsidence, this can present even more of a challenge than arranging the mortgage itself, and premiums are likely to be higher than usual, since most lenders will insist that you take out a specific subsidence insurance policy, which is a more specialist product than most standard buildings policies.

Is it possible to remortgage with subsidence?

If you already own a property with subsidence and you want to remortgage with a new provider, you are essentially in the same position as anyone looking to buy a house with subsidence: the vast majority of lenders will not want to touch your property until the problem is rectified, so realistically you’ll need to have it rectified before approaching any.

One option may be to stick with your current lender and to switch products with them, but most will not allow you to do this until the work has been successfully carried out. As an incumbent you are still in a stronger position than an incoming buyer however, and you may be able to negotiate a deal with your existing lender by expressing an interest to look elsewhere.

Subsidence and mortgage lending

Most mainstream lenders will accept properties that have had subsidence that has been properly resolved, particularly if no further movement has been seen for 10+ years, so in this situation, you shouldn’t have to seek out special mortgage lenders for subsidence property.

You may, however, be expected to put down a larger than average deposit for a history of subsidence mortgage, and the rates may be elevated if the problem was more recent and/or severe.

To be sure of getting the best available rates, it’s important that you speak to an advisor with access to the entire market – especially if you have any credit issues, are nearing retirement or are purchasing a non-standard property, since these factors will limit your search further, and you’ll want to cast the net as wide as possible.

Speak to a whole-of-market subsidence mortgage expert today!

If you want further advice regarding buying a house with subsidence and want to speak to an expert for the right advice, call Online Mortgage Advisor today on 0808 189 2301 or make an enquiry online.

Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances. We don’t charge a fee and there’s absolutely no obligation or marks on your credit rating.

Updated: 4th December 2020
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FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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