How to ensure you don't have a housing crash of your own

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The Independent Online

As summer approaches and temperatures rise, it's time to keep a close eye on your walls, as you could find that your home is cracking up.

Unusually hot weather, as already experienced this year, has an impact on the foundations of a home because it leaves the ground very dry - increasing the risk of subsidence. In extreme cases, this can cause major structural damage.

Whatever the extent, subsidence can bring extensive costs, inconvenience and worry, and with another hot summer predicted after last year's drought, more and more properties could be affected.

Findings from the Association of British Insurers show the number of subsidence claims has risen in recent years - a 50 per cent increase since 2002. Last year alone, UK insurers paid out £302m on these claims.

Subsidence is caused by a period of hot weather that dries out, and weakens, the soil beneath houses, reducing the load-bearing capacity of the ground and causing buildings to shift.

It is a big threat to properties that have been constructed with shallow foundations - most commonly Edwardian and Victorian houses - because they are more susceptible to this "heave".

Subsidence specialists warn that as global warming continues, the problem will become even more prevalent.

"During the hot summer months, the risk increases," says Neil Curling from Halifax Home Insurance. "Vegetation in the garden is growing rapidly and demands more moisture, while at the same time, the weather is at its driest."

Properties in the South-east are particularly at risk, he explains, because of the higher prevalence of clay-based soils in the region, which shrink as they dry out. Some 70 per cent of all subsidence claims are in areas of clay soil. "People will often see cracks appear in their gardens during summer," adds Mr Curling. "It's not the clay itself that causes the problem, but trees and other vegetation extracting moisture from it."

Indications that a property might be suffering from subsidence include cracks in walls, particularly if they start from corners of windows or doors, which may become difficult to open or close. Any cracks that are the thickness of a 10p coin - and wider at the top than the bottom - should be checked.

While nothing puts off potential buyers of a property quite like a history of subsidence, Peter Gerrard from price-comparison service says home-hunters needn't avoid houses that may be at risk - or even those that have experienced the problem already. "They just need to be approached with caution," he says.

Mr Gerrard recommends buyers use the Land Registry to research whether houses in the local area have been affected. It's also worth having a full structural survey carried out when you buy a property, especially if it is more than 10 years old.

The Halifax recommends checking the survey for historical information, as around 15 per cent of subsidence claims are due to old mining activity beneath a property.

"A survey of the drainage of the property can identify the risk of subsidence caused by water leaking into the soil beneath," says Mr Curling. "Figures show many claims are caused by water washing away some of the finer soil in the ground. The local water authority can carry out checks on the incoming water main."

Homeowners, meanwhile, can take steps to minimise the risk of subsidence, such as avoiding planting trees or large bushes too near to buildings.

"Tall trees close to the house can be bad news, particularly for homes built on clay subsoil," says Mr Curling. "They take water out from the ground and cause it to shrink and move.

"Tree removal solves 84 per cent of tree-related subsidence claims. If this is not possible, pruning of branches followed by regular maintenance may be the next best thing." However, he warns that this is not a guaranteed solution, and that maintenance can become expensive.

If you spot signs of subsidence, contact your insurance company as soon as possible. The sooner the cause is identified and remedied, the sooner the repairs can be undertaken. One option that the insurer may recommend is "underpinning", where concrete is used to buttress your home's foundations.

Subsidence damage is normally covered by buildings insurance policies, but when it comes to seeking cover, Mr Gerrard urges homeowners to be as honest as possible.

"If you are aware of a subsidence situation when you move into a new property, fully update your insurer," he says. "If you notice signs in your existing property, notify your insurer immediately to ensure the problem is dealt with early and to avoid future complications."

Mr Gerrard adds that if you have any work done to your home to reduce the effects of subsidence, you should keep all the certificates as evidence.

When buying a house that is showing signs of subsidence, you should inform your bank or building society, says Nick Gardner from broker Chase de Vere Mortgage Management. "Some lenders get a bit twitchy about lending on properties in this situation, but as long as they can see that the problem can be dealt with - and that it will be paid for - there should not be a problem."

He recommends that buyers purchasing a property that has suffered from subsidence in the past should continue to insure it with the same firm.

Valued at £0, so the home purchase fell through

David Hyde, 28, from Streatham in south London, recently withdrew from the purchase of a property in neighbouring Tooting after the survey showed a serious subsidence problem.

David had made two visits to the three-bedroom terrace house and put in an offer at the asking price of £325,000.

He had already secured a mortgage agreement in principle from Alliance & Leicester (A&L), so once he had his offer accepted, he moved on swiftly to arranging a homebuyer survey at a cost of around £800.

"The survey was instructed on the Monday and carried out [at the same time as the lender's own survey] on the Tuesday," he says. "But on the Thursday I was shocked to receive a letter from A&L saying that, for the purpose of the mortgage, the property had been valued at £0."

A major subsidence problem included doors that did not shut and trees growing nearby.

"I wonder if I'm the first buyer to put in an offer and get this outcome, or whether this has happened to others," says David. "I'm not sure if there's any way of finding out if a property has had a 'bad survey' in the past and whether there's anything to stop it happening to people in the future."

David informed both the estate agent and property owner of the issues that came to light in the survey - but thinks the house is still on the market, and at the same price.

He has since found a new property in Streatham, and is about to exchange contracts.