Does Underpinning Devalue My House?

If you’re worried about underpinning devaluing your property, we’re here with the answers to your questions. In this article, we’ll find out more about underpinning and subsidence, the costs involved, and the effect on your property.   

What is Underpinning? 

Underpinning is a technique used to correct properties that have suffered from or are suffering from subsidence. Underpinning will strengthen the foundations and the process involves removing soil from beneath the property that has been moving away. The soil is then replaced with stronger materials and deeper footings to stabilise the property and the property’s structure. 

Essentially, underpinning involves weakening the property’s damaged foundations in order to put in newer and stronger foundations so as to stabilise the property’s structure. There are different types of underpinning and the type used to underpin your property will depend on your property and its situation. 

Why Would a Property Need Underpinning? 

A property would need underpinning as a result of being affected by subsidence. 

What Causes Subsidence?

It can happen naturally, or it can be due to human activity. Typical causes are tree roots that are near to the property, drainage issues, or underground mining that has affected the land. Pipework beneath or within your foundations can also cause subsidence if they leak or burst. This is because they will cause the earth to be washed away, making the ground unstable.

How Can I Spot Subsidence?

Subsidence is usually quite obvious and can be seen as large cracks, particularly around windows and doors. You may also spot wallpaper that’s rippled or ripped or seen cracks appearing between an extension and the original building. Other tell-tale signs are paths or driveways that sink or dip, as well as sloping floors.  

Small cracks are perfectly natural and are caused by natural shrinkage due to temperature and humidity changes. In fact, brand new homes with fresh plaster will show small cracks when the plaster has dried out. It’s the large (especially diagonal) cracks at the edges of windows and doors that are wider at the top than the bottom that suggest subsidence and will devalue your house.  

Will Subsidence Devalue my Property?

It’s fair to say that subsidence will devalue your house because of the unknown (and potentially growing) costs that are involved in fixing the problem.  

Truth is, there’s no way to calculate just how much subsidence devalues a property because there are so many factors to consider, such as the extent of the damage, the cause of the subsidence, and the location. Therefore, it’s not possible to put a precise figure on exactly how much your property will be devalued by subsidence. However, it’s estimated that the amount your property is devalued by subsidence is the cost of repairs, PLUS around 10%.

It can go even higher than that, meaning that depending upon the extent of the issue, subsidence can negatively affect the value of a property by 25%. And that’s if you’re able to find a buyer willing to take it on.

The number of people prepared to buy a property with subsidence is limited (even if it has been fixed and you’ve got paperwork to prove that) due to high insurance premiums, so the reduced demand will invariably result in a reduced offer being made for your home.   

You may find that it’s preferable for you to address the issue rather than putting your property on the market with the subsidence problem so as to limit the amount of money you’ll lose through subsidence devaluing your property.

Repairs can be expensive though, so if you’re selling without repairing, expect to lower your asking price by at least the cost of repairs; and maybe more.  

If you want to know how much you’ll need to take off the asking price, take a look at this next section.

How Much Does it Cost to Repair Subsidence? (and How Much Will Subsidence Devalue My House if I Don’t Pay for the Repairs?) 

The size of your property can affect the overall cost of the job by a significant amount. For example, the price for underpinning a two-bedroom terraced house would be around £5,000 on average, whereas the same type of subsidence fix on a four bedroom detached house could run to £17,000 due to the latter having a larger footprint. 

As previously mentioned, it’s estimated that the amount your property is devalued by subsidence is the cost of repairs, PLUS around 10%, so keep that in mind when looking at these figures.

There are a number of potential options available to fix the issue of subsidence, although they can run into thousands of pounds depending upon the size of the job:   

In major cases of subsidence, you may be advised that the only reasonable solution to your issue is to have your home underpinned. This is a process of adding to your property’s foundation depth or breadth to increase the surface area and ensure your home can sit on a more stable surface. 

The extent of the underpinning required will depend upon the amount of land affected and this process can take between three to six weeks for a single wall to be underpinned; depending on the severity of the subsidence and the size of your home. 

If more than one wall requires underpinning, the process will take considerably longer, and the price will increase accordingly.

Although underpinning generally fixes the problem of subsidence, it can still devalue a property because some buyers won’t want a previously underpinned property as they could think that it may require further structural work in the future.

Depending on the repair method needed, the time taken to fix your issue may extend to up to eight weeks in extreme cases of subsidence where underpinning is required across multiple walls.

However, it could be that your home needs to be monitored before underpinning can commence, so the process could take up to a year to complete and naturally the fees will rise even further.   

Unfortunately, the costs to consider for subsidence devaluing your property don’t end there. When the source of your house subsidence has been addressed, additional work could be needed to rectify damage that has been caused. This could typically include: 

Replacing Bricks  

This could be required if bricks have been cracked or damaged. Budget on around £120 per metre sq. for materials. Add to that the labour charge for a brick layer (between £150 – £325).  

Repointing Brickwork

This can be done by a DIY enthusiast who has patience and knowledge. Otherwise, work on £40 per metre sq. for a professional to do the work.

Rendering External Walls  

If you have rendering that has been damaged by subsidence, you may want to have your affected walls re-rendered. Due to the requirement for scaffolding, average costs can be £60 per metre sq.

Replacement Windows  

Subsidence can cause window frames to warp, so replacement windows could be on your shopping list. Costs will depend on materials but expect to pay around £325 per window.  

Internal Plastering and Decorating Costs 

Damage caused to internal walls by subsidence results in unsightly cracks so hiring a plasterer or decorator to fix the affected areas (or whole walls) would be sensible before embarking on decorating. You’ll need £200 – £250 per day, plus materials.  

Repairing Damaged Plumbing 

Leaking or damaged underground pipes will cause excessive water to be in the soil surrounding your property. This will wash away soil and cause your home to subside. A CCTV survey can determine if this is cause of the subsidence.

Whilst small holes in your pipes can be patched and repaired, full ruptures or blockages that cannot be removed will require new pipes to fix the issue. Depending upon the size of the problem, costs can be around £1,000.   

Does my House Insurance Cover Subsidence?  

Some house insurance policies will cover subsidence, but only if your house has not had it previously. It will of course depend upon your individual policy, but many cover damage and the cost of repairing items, as well as alternative accommodation whilst the work takes place. Underpinning is sometimes only covered by a specialist insurance package, so it’s best to check the finer details with your provider.

Many home insurance companies won’t cover properties that have been underpinned or have any history of subsidence, but if they do, premiums are likely to be higher than average.

If your home insurance policy does cover the cost of subsidence repairs, you’ll likely have to pay an excess, so it won’t be totally free for you.   

Do I Have to Declare Subsidence When I’m Selling (Even if it’s Been Fixed)?

It’s important that you are honest and declare any problems with subsidence, including any work that has been undertaken to rectify the problem. You have a legal responsibility to share this information with your agent and conveyancing solicitor.   

You’ll also need to include any information about subsidence on the Property Information Form (known as ‘TA6’). This has to be completed as part of the conveyancing process. Form TA6 gathers details about your property’s features and problems so it will be the place to provide a record of any claims you’ve made on your buildings insurance for subsidence issues; even if your property has suffered from subsidence in the past but it’s no longer a problem.

Being open and upfront reduces the risk of a buyer pulling out of the sale or asking for a price reduction part way through the sale process.   

If you’ve had your property underpinned, you’ll want to share with your potential buyer the local council’s completion certificate and tell them how long it has been without any subsidence issues.  

It’s important to remember that if you inform a buyer (either via the TA6 form or elsewhere) that there aren’t any defects and the buyer then later discovers that there are issues, you could face a misrepresentation claim because subsidence will certainly have an impact on the property’s value, and the cost of repairs can be significant. If you are found to have misrepresented the property, you can expect to pay damages to the new owner to reflect losses they will have incurred, as well as the legal fees.  

I Want to Sell My House, but it has Subsidence that I Can’t Afford to Fix. What Can I Do? 

If your property is showing signs of subsidence, you’ll probably find it hard to sell because the very mention of the word can scare off potential buyers. In this situation, a cash buying company can be your best option because they won’t need to secure a mortgage; they’ll buy your house for cash.  

The price you’ll get in this situation will of course take account of the costs needed to fix the subsidence, but it means you’ll receive a sum that you can use to buy your next property. In the meantime, the cash buying company will carry out the subsidence repairs – as well as anything else that needs to be done – and then sell on the property.

Whilst you may want more than the cash buying company can offer you for your property with subsidence, you should remember that you’ll get a hassle-free sale and you won’t have to pay estate agent fees nor legal fees. That’s because companies that buy any house for cash will cover those costs on your behalf.    

If you choose to sell to a cash buying company, you won’t have people walking through your property pointing out the cracks and dated décor. You won’t have a ‘for sale’ sign in front of your home to alert the neighbours that they can go online to have a virtual snoop around. What you will get is a hassle-free sale when you choose a reputable company, as well as their property expert to provide you with a free, no-obligation market appraisal. The price they offer is likely to be around 80% of your property’s true market value, but that is to take account of the fees that you won’t have to pay, the renovation work undertaken by the company to get it re-sold, and the convenience of selling to a buyer that isn’t in a chain. 

To achieve super-fast sales, you as a seller will have to take a hit on your price. Cash buyers typically offer around 70% to 80% of the current market rate; sometimes more. If you’re considering a cash buyer, you must be aware of two important points. 

First is that there’s little regulation in this industry so it’s often a haven for scammers. Anyone can set up a business and say they’re a cash buyer. However, that doesn’t mean they have cash or that they’re competent. It’s up to you to do your due diligence and check where their money comes from, what experience they have, the price they offer and everything else. Secondly, cash buyers are a business and like any business, their aim is to make a profit..  

How Does a Cash Buying Company Actually Work?  

Companies that buy houses will buy your house fast for cash, usually within 30 days, with most completing the sale within 7 days. When you reach out to these house buying companies, they’ll ask for your details and those of the property, after which they’ll have a valuation. Then they’ll give you an offer. If you accept the offer, they will process the payment and you should receive funds in your account within a few days. This means you don’t have to worry about being in a chain or chasing up an estate agent. 

Anything Else I Can Do to Sell My House?  

Yes, there is. You could also consider one of these four options:

1. Open house day

Holding an ‘open house’ day is usually a one-day event that will create excitement and competition between buyers and could result in a bidding frenzy. Listing just below market value will get viewers through the door and then they’ll push the price above the listed figure; but only if you get enough people through the front door, and if they can look past the subsidence (or underpinning). 

2. Auctions

The digital property auction is a preferred option for many sellers. Almost any property can (and usually does) sell at an auction. Auctions encourage competitive bidding, frequently pushing the price beyond what you wanted (especially if your property’s desirable). And you’re not obliged to accept any bid below your reserve price. Modern auctions are handled online and have flexible deadlines, meaning anyone can bid and have enough time to sort out finance before the exchange and completion deadlines. Property auctions typically come in three forms:

Traditional auctions 

The most secure and quickest way to sell is the traditional auction. Before the auction, your agent or solicitor provides a legal pack that includes everything a buyer needs to exchange contracts. The buyers do their due diligence in the run-up to the auction, then they’ll bid and contracts are exchanged when the gavel falls. The buyer is legally bound to buy your property from that moment and usually has 28 days to complete.   

Flexible auctions 

The modern version of the traditional auction takes a step back from the well-known ‘going, going, gone’ approach we’ve seen on TV programmes. In a flexible auction, contracts aren’t exchanged when the gavel falls. Instead, the winning buyer pays a non-refundable deposit (often called a ‘holding fee’, ‘reservation fee’ or similar) to secure the sale. They get a fixed period (usually 28 days) to exchange contracts and then a second period to complete. Sellers don’t need a legal pack as the buyer has time to do due diligence in the first period.  

Although it’s often called a ‘modern’ option, flexible auctions have been around for a long time and have grown in popularity because they work well online. Bidders can be anywhere in the world and the auction is usually held over a period of time (such as 14-21 days) instead of having to be in an auction room on a specific day. 

Buyer-friendly auctions 

Traditional and modern auctions both put the fee burden on the buyer. Sellers pay nothing because the auction fees and reservation costs all come out of the buyer’s pot. As a model, this can limit the number of interested buyers; especially first-time buyers who discover there are additional payments to make.   

Similar to the flexible auction, buyer-friendly auctions go a step further by being extra-flexible on completion times and moving the fees to the seller. While that may sound like it won’t work in your best interest, the flexible deadlines mean most buyers can participate. The ‘zero fee’ for buyers means there’s a greater number of interested people and that will push up your sale price.   

3. Part exchange

Part exchange isn’t a new idea, even in the property sector. In fact, builders have been doing it for years. They take your old house as part-payment on a new build, reducing the price and giving you a guaranteed sale so you’re not stuck in a chain. The advantages of this option of selling your house are numerous. You’ll have a guaranteed buyer, so there’s no fear that your sale is going to fall through. And with no chain, there’s no delay. If your dream-home purchase gets delayed, you can often stay where you are until it’s sorted. If the absolute worst happens and your purchase should somehow fall through, you keep your current property so there’s no worry about being homeless (although this isn’t the outcome you want if you’re trying to sell). Also, because you know exactly how much you’ll be getting for your house, you can act like a cash buyer and push for discounts or tight deadlines on your new home. However, this may be more difficult for you if your property does have subsidence or it has been underpinned in the past.  

4. Assisted sale

An assisted sale is specifically designed for homeowners who want to sell but whose property needs work and refurbishment. It’s especially good for people with second properties, or if you’re moving into rented accommodation. With an assisted sale, you sell your property to a company for a fixed, guaranteed amount. When the deal has been done, you keep ownership on paper and the company markets the property for sale (using a Power of Attorney). 

The difference here is that the company pays the running costs for the property until it sells to a new owner, without it affecting your agreed sale price. They will pay legal and estate agency costs, maintenance and service charges, ground rent, utility bills, insurance and council tax; even your mortgage payments. An assisted sale is just like selling your house in the traditional way but it’s quicker and simpler, and it relieves you of the ongoing burden much faster than even the fastest cash sale. This could be a great benefit to you if you are having trouble selling your house.

Any Questions?  

We hope this article has helped you to find out more about underpinning and how it affects the value of your home. If you need any further advice about selling a house to a cash buyer, call us or send an email.