Getting a Mortgage on a Property Near a Mineshaft

There’s a rich mining history in the UK, so given the relatively small size of the country, it’s perhaps unsurprising that over 100,000 homes are located near abandoned mine shafts. If you’re looking to buy this type of property, you’re probably questioning the feasibility of finding a mortgage.

In this article, we’ll look at how a mineshaft in the vicinity of a property affects your ability to get a mortgage, and how to overcome any lending barriers you do encounter, with the right advice.

Can you get a mortgage for a property near a mineshaft?

Yes you can. There’s actually a surprising number of lenders willing to offer mortgages under such circumstances. You’ll need to meet specific criteria associated with the additional risk, but many lenders are happy to consider applications, so long as adequate legal and regulatory assurances are provided.

Lender concerns

There are certainly risks involved with living nearby disused mines, so it’s perhaps understandable that some lenders can be apprehensive about lending on properties in this type of location.

Their major concern is the potential for the loss of compromise to their investment, as a fall in property value is well documented for homes in mining regions, especially if damage has occurred due to their proximity to mine shafts. In fact, there have been cases where a property has lost up to 100% of its market value.

Whilst significant property damage or loss is fairly rare, the following risks do exist for land containing disused mines, and have the potential to be catastrophic to any properties located nearby:

• Sinkholes
• Soil erosion
• Flooding
• Contaminated ground and surface water

The majority of disused mines have now been filled, which stabilises the ground, reducing the potential for any of the above issues to occur. That said, collapses have been known to happen decades later. It’s strongly recommended you pay particular attention to the advice of surveyors and ground stability experts, regardless of any lender requirements to do so.

If your looking to purchase a home on old mining land, don’t write it off straight away. Not all mortgage advisers will have the level of expertise you need, but our free broker-matching service will pair you with a broker with the knowledge necessary to secure a mortgage on a property nearby abandoned mineshafts.

What to do if you’ve had a mortgage refused because of a mineshaft

Although there are often control measures required, there are very few properties that would be considered universally unmortgageable due to the proximity of disused mineshafts. The chances are, if you’ve been refused a mortgage under these circumstances, it’s simply because you’ve not found the right lender.

The brokers we work with have a wealth of knowledge and experience in securing mortgages for properties based near abandoned mineshafts and know which lenders will consider this type of application, as well as how much risk each are willing to accept.

This means that they have the best chance of securing you a suitable mortgage, no matter how close mineshafts are to your property, and in some cases, even where prior damage has occurred in the area.

Simply get in touch and we’ll match you with a broker that specialises in this type of application.

Lenders’ policies

The majority of lenders in this niche will be happier to approve a mortgage if the property in question is further than 20 metres from any mineshafts. Both high street and specialist lenders are available in this niche, although some will insist on working with intermediaries, which means you’ll need to go through a broker to access them.

Each lender has their own specific criteria in relation to lending on this type of property, for example, HSBC and Halifax are willing to consider applications based on satisfactory surveyor/environmental reports. However, Barclays and Santander also add a caveat that the marketability of the property should not be impacted by its location.

Criteria that you may need to meet and apply more generally across the niche include:

• Property must be more than 20 metres from a mine
• A lower LTV (Loan to Value) or lending cap on the maximum loan size often applies, meaning you may need a larger deposit to compensate
• A requirement for mining reports and in some cases, more extensive local searches

Resolution of past issues – It’s likely to be more difficult to find a lender if your property is in an area with a history of prior issues directly caused by mining. However, underpinning may be an acceptable resolution to some lenders for properties with subsidence as a result of a shaft collapse, for example.

How close to a mineshaft can you build?

The Law Society, Royal Institution of Chartered Surveyors, Council of Mortgage Lenders and Association of British Insurers are all in agreement that 20 metres away is the minimum acceptable distance.

If you’re planning to build your own home, it might prove quite difficult – but certainly not impossible – to get a self-build mortgage if the land you’ve earmarked is near a mineshaft. It can add another level of complexity to simply buying a property on risky ground, as self-build mortgages are a fairly niche area of lending in their own right.

The further your building plans are from local mineshafts, the less of an issue it will be. If you want to proceed you’ll absolutely need a broker to find a specialist lender in these circumstances. They may even be able to look into alternative finance options, such as bridging loans.

Legal requirements

There are a number of building regulations that you will need to comply with in order to begin development on this type of project. Planning permission may be difficult to obtain, and you will need to submit a Coal Mining Risk Assessment alongside your application to the local authority.

If you are looking for finance, it’s unlikely to be possible without planning permission, however, an experienced broker may be able to advise you with regard to the risk assessment and similar requirements.

Mining reports and survey requirements

Whilst coal mining was the most prominent mining industry in the UK, it was by no means the only type of mining activity, and to some degree, the geographical location of the property can provide clues as to what type of mines could be present. Although the risks are similar no matter what type of mineshaft is nearby, it can make a difference in terms of who to contact for searches, as well as how much financial protection you have from such risks.

Lenders may request any or all of the below searches, depending on the area and a broker with the right experience will be able to recommend reputable conveyancers in this niche:

• Coal mining – this is the most widespread type of abandoned mine, and arguably the least likely to collapse, given that the coal mining industry has filled many of their disused shafts. The Coal Authority provides free mining information and a wide range of in-depth reports which cost between £50 and multiple thousands of pounds, depending on their scope. Due to the Coal Mining Subsidence Act 1991, any property damage caused as a direct result of coal or brine mine shafts is generally covered by the Coal Authority, who will provide repairs where necessary and compensation for the depreciation of property value.

• Tin and copper mining – this type of mine is often found in Cornwall, South West Devon, and Somerset. A Metalliferous Mining Search will probably be necessary in these areas of the country in order to find out the proximity of your property to local mines, as well as the level of risk they pose.

• China clay mining –  this type of mining occurred in Cornwall, Dorset, and Devon. A clay mining search can be obtained from specialists and will likely be required by lenders if you choose to buy in an affected area.

Get matched with a broker experienced in complex cases

If your dream home is on old mining land, don’t write it off straight away. Once you’re certain that the level of risk is acceptable on a personal level, an expert broker will be able to find you a lender with the same mindset.

Due to the relatively niche area of lending, not all mortgage advisers will have the level of knowledge you need, but our free broker-matching service will pair you with a broker with the precise experience necessary to secure you a mortgage on a property nearby abandoned mineshafts.

Simply reach out on 0808 189 2301 or make an enquiry and we’ll get the ball rolling. There’s no cost for your initial consultation and all of the brokers we work with offer a success-only payment structure.