What Is Subsidence

Subsidence is a very real risk to landlords, especially those with extensive portfolios, as your ability to let your buy-to-let property may be affected.

What is Subsidence? - Infographic

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What is Subsidence?

“Downward movement of the ground beneath the buildings other than by settlement”

– Definition given by the Financial Conduct Authority (FCA)*

Subsidence is the ground beneath your property moving downward, providing less support to the building. This is not as a result of the weight of the building, which is referred to as “settlement”.

What is Heave?

“Upward movement of the ground beneath the buildings as a result of the soil expanding”

– Definition given by the Financial Conduct Authority (FCA)*

Moisture absorption beneath the property causes the soil to expand, pushing the ground beneath the building upward. This way result in noticeably raised floors or bowed basement walls.

Though heave is different from subsidence, in terms of insurance it is usually classed as the same as they display similar symptoms.

What is Landslip?

“Downward movement of sloping ground”

– Definition given by the Financial Conduct Authority (FCA)*

Landslip is a gradual movement of the earth beneath your property at a sloping angle. You may notice trees starting to lean at an angle.

What is Settlement?

“Downward movement as a result of the soil being compressed by the weight of the buildings within ten years of construction”

– Definition given by the Financial Conduct Authority (FCA)*

Most cracks are a result of settlement, so don’t panic over the odd crack here and there.

What causes subsidence?

  • Trees and large shrubs growing too close to your property, and absorbing the moisture of the soil beneath your property
  • Leaking drainage systems softening the ground
  • Soil erosion
  • Faulty building designs or materials
  • If the property is built on or nearby land previously used for underground mining activity

Spotting early signs of subsidence…

Repairing damage caused by subsidence and heave can be extremely expensive, so it is vitally important to spot subsidence early. Even with insurance in place, you should expect an excess of about £1,000. Not to mention the loss of rental income during the repair work and any alternative accommodation which you may have to arrange for you or your tenant.

Old houses from the Victorian or Edwardian era are more susceptible to subsidence due to the shallower foundations. Additionally, properties in the South East of England are also more at risk due to the prevalence of clay soil in this area of the country. Clay soil is sensitive to the weather and different moisture levels. It’s the most shrinkable soil type as it is approximately 30% water, so shrinkage is caused by the drying out of the clay soil.

Some noticeable signs of subsidence include wide cracks in your walls that are wider at the top, and often diagonal. The subsidence may also warp doors and window frames.

How subsidence affects you as a landlord

Most buildings insurance policies will cover damage or loss caused by subsidence, as well as heave and landslip – but will not cover for the prevention of it, only the repair. Make sure to double-check with your insurer that subsidence is included in your policy!

In some instances, you may decide that the profitability of the buy-to-let property outweighs the risk of subsidence and costs of future repair, due to the location or property features. But the history of subsidence must be declared to your landlord insurance company, as it is likely to affect your premium.

If your property has been underpinned, then it indicates to insurers that your property is still at risk of further subsidence and may result in a higher premium. It may even be that a neighbouring property has a history of subsidence or has had to be underpinned. This can also affect your insurance premium due to the risk of your property also subsiding in future.

Subsidence caused by an escape of water (e.g. leaking drainage systems) will usually be considered under that respective peril, as opposed to “subsidence” – often with the advantage of a lower policy excess for the customer.

Insurance companies may reject your claim for subsidence damage if the damage caused is proven to be caused by settlement or another uninsured event.

* The Financial Conduct Authority (FCA) was previously known as The Financial Services Authority (FSA) at the time their definitions of “subsidence”, “heave”, “landslip”, and “settlement” were published in 2011.

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