The Golden Rule: Transfer the Seller's Buildings Insurance
The biggest obstacle when buying an underpinned or subsidence-affected property is not the mortgage lender, but insurance underwriting.
New insurance providers frequently decline to quote or demand prohibitive £2,500 to £5,000 subsidence excesses. However, the Association of British Insurers (ABI) Subsidence Agreement obliges the existing insurer to continue offering coverage to the purchaser, provided the claim is settled.
Ensure your conveyancer makes policy transfer a binding pre-condition of contract exchange.
| Subsidence Scenario | Lender Mortgage Feasibility | Insurance Availability | Recommended Action |
|---|---|---|---|
| BGS Soil Risk Zone Only (No Cracks) | 100% Feasible (Standard rates) | Standard market insurance (£1,000 excess) | Proceed with normal RICS survey |
| Historical Settled Movement (CSA issued) | Feasible with major banks | Transfer seller's existing policy | Request 5%–10% purchase discount |
| Active Monitored Movement (< 12 months) | Mortgage retention / declined | Specialist broker only (high excess) | Delay exchange until monitoring ends |
| Un-remediated Structural Damage | Mortgage strictly refused | Declined by standard market | Cash purchase only / major price reduction |
Negotiating Purchase Price Deductions
A documented subsidence history creates buyer hesitation in the market. Conveyancers routinely negotiate a 5% to 15% discount off asking price to compensate for future resale stigma and higher insurance excesses.
Use our free online tool to inspect local geological soil maps before submitting your formal offer.