Underpinning a house is a stressful, expensive process. Unfortunately, the stress doesn’t stop there. You will face even more challenges when it comes to selling an underpinned property.
So, why is it difficult to sell a house that has been underpinned?
It is hard to sell a house that has been underpinned because you will have less interested buyers. Buyers can be put off for several reasons including the associated stigma, increased insurance premiums and future saleability of the property. It can therefore take a long time to find a buyer on the open market.
In this article we will look in depth at the six reasons why it’s so hard to sell a house that has been underpinned.
This article should give sellers a greater understanding of the challenges you may face when trying to sell an underpinned house.
The main thing to remember is that it’s still possible to sell an underpinned property and achieve a great price. However, it can be useful to understand the hurdles you have to overcome so you can prepare accordingly.
1. Why is it hard to sell a house that has been underpinned?
Underpinning is a construction method used to strengthen and stabilise the foundations of a house. The most common reason for underpinning a house is subsidence.
In theory, selling a house that has been underpinned should be relatively straightforward.
The house is structurally sound and has been signed off by a structural engineer and the Local Council Building Control Officer. This means that potential buyers can now obtain a mortgage and insurance policy, albeit at a higher price.
Unfortunately, in practice, it’s a different story.
It’s always surprised me that I receive as many calls from home sellers struggling to sell a property with a fixed historic subsidence issue as I get from those with a current issue.
Let’s take a look at some of the reasons why it’s so hard to sell an underpinned home…
Reason 1: Stigma
The number one reason why it is hard to sell an underpinned house is the associated stigma.
An underpinned property is arguably more structurally sound than a neighbouring property that hasn’t been underpinned. This is especially true in areas prone to subsidence, such as Greater London which has a high concentration of clay soil.
Buyers don’t see it this way a lot of the time. When people think of underpinned properties, they think of subsidence, the risk of future problems, unwanted stress, expensive to maintain…the list goes on.
Unfortunately, buyers associate a lot of bad things with underpinned houses. So, finding out that your property has been underpinned will put a lot of buyers off.
Many buyers will also be worried about purchasing a home with a history of subsidence.
Even if you do find a buyer who is happy to purchase an underpinned property, there’s also the risk of friends and family deterring them before the transaction becomes legally binding.
This is why it’s so important to provide the buyer with all of the necessary certificates and guarantees. You need to be able to reassure buyers that the building is now structurally sound.
Reason 2: More expensive to insure
Properties that have been underpinned tend to be more expensive to insure. This can put buyers off as it’s an extra expense to think about.
Not all insurers will provide quotes for subsidence cover on a property that’s recently been underpinned. Some feel it’s too much of a risk, as there are no guarantees that the property will not need structural work in the future.
Some providers may include lots of exclusions. Other providers may charge higher premiums and excesses. For example, if a standard subsidence excess if £1,000, this may be increased to £2,500 for an underpinned house policy.
What about if the underpinning happened many years ago? If the property has shown no further signs of movement, then you should have no problem getting affordable cover.
If the underpinning happened within the last decade or so, be prepared for buyers to negotiate slightly on the price. They may want to factor in the extra money they’ll need to spend to insure the property into their offer.
Reason 3: Recent repair works
Buyers are going to be more wary of a house that has been recently underpinned than a house that was underpinned 25 years ago.
Buyers want to see evidence that the underpinning has fixed the problem and that there’s little risk of future ground movement. It’s much easier to demonstrate this when a few years have passed since the repair works were carried out.
A structural engineer will monitor the property once it’s been underpinned. This is to ensure that there’s been no further movement before signing off the works and issuing the Certificate of Structural Adequacy.
Even with a Certificate of Structural Adequacy, insurers will charge higher insurance premiums and excess if a house has been recently underpinned. This is because of the perceived additional risks associated with an underpinned house.
It’s fair to say then that buyers may also have the same concerns.
If your house has been recently underpinned, make sure to pull together all the necessary documentation to put your buyer’s worries at ease. It’s a good idea to provide the following documents, if available:
- Certificate of Structural Adequacy
- Formal Completion Certificate
- Structural engineer’s report
- Ongoing monitoring reports
- Details of remedial works, including the company that carried out the works
- Any guarantees or warranties associated with the works carried out
The documents are the best way to prove to the buyer that the property is structurally sound when you don’t have time on your side.
Reason 4: Source of the subsidence
The main reason why a house is underpinned is because of subsidence.
Buyers will want to know if the source of the subsidence has been removed or properly dealt with. If not, some buyers may worry about the risk of it happening again.
In some instances, the source of the subsidence cannot be removed, such as a mature tree. Sometimes, removing a tree can create additional problems and cause ground heave.
In these cases, the tree will need to be regularly cut back and maintained to reduce the risk of future ground movement. Some buyers will be put off by the additional risks, work involved and ongoing maintenance costs.
Reason 5: Competition
The level of competition in the market will affect how difficult it is to sell an underpinned property.
If you try to sell at a time when there are lots of alternative properties on the market, you may struggle to get buyers through the door.
Buyers will always pick the house that has no history of subsidence over one that does (even when the problem has been fixed).
On the other hand, a market with low competition and high demand for properties may make it easier to sell an underpinned house. Buyers will have less to choose from, and so may be more open to considering an underpinned home if the location is right for them.
Reason 6: Future saleability
Lastly, it can be difficult to sell a house that has been underpinned because of the future saleability of the property.
Buyers are always going to consider how easy it’s going to be for them to sell the property when they decide to move on.
Generally, it will take a lot longer to find a buyer who is willing to buy an underpinned property. You are at greater risk of buyers pulling out too, as they might get cold feet after looking for insurance or speaking with friends and family.
However, if your house is one of many in an area that has been underpinned, it might be less of an issue. This is especially true if you’re also selling in a market with high demand.
2. Further reading
If you want to know the best way to sell an underpinned property, you can read my article “Can I sell an underpinned house? [Best ways to sell]” here. We explore the best ways to sell a house based on your priorities and look at the pros and cons of selling by auction vs. with an estate agent.
By Matthew Cooper, Co-Founder of Home Selling Expert