Remortgage With Underpinning

How Does Underpinning Affect a Remortgage?

Underpinning is generally viewed by lenders as an indicator that the property has experienced structural issues at some point. Even though the work itself resolves the problem, lenders are cautious because the need for underpinning raises questions about the property's long-term stability and insurability.

The main ways underpinning can affect your remortgage include:

• Fewer lender options — Some mainstream lenders automatically decline applications on properties that have been underpinned. This reduces the competition for your business and can limit your access to the most competitive rates.
• More detailed valuation — The lender's surveyor will need to assess the underpinning work, its extent, the method used, and whether the property has remained stable since the work was completed. A basic desktop valuation is unlikely to be sufficient.
• Insurance requirements — Lenders need to see that your buildings insurance covers the property adequately, including cover for subsidence. Properties with underpinning can sometimes face higher insurance premiums or exclusions.
• Impact on property value — Underpinning can affect the perceived market value of a property. Some buyers and valuers view underpinning negatively, which can result in a lower valuation and a higher loan-to-value ratio.

The extent to which underpinning affects your remortgage depends on several factors, including the reason the work was carried out, the method used, how long ago it was done, and the quality of the documentation available.

Types of Underpinning and Lender Attitudes

There are several methods of underpinning, and the type used on your property can influence how lenders view your application. Understanding the different approaches can help you anticipate what questions lenders may have.

Traditional mass concrete underpinning

This is the most common and well-established method. It involves excavating sections beneath the existing foundations and filling them with concrete to create a deeper, more stable base. Lenders are generally familiar with this approach, and most who accept underpinned properties will be comfortable with mass concrete underpinning, provided the work has been properly carried out and documented.

Beam and base underpinning

This method involves constructing a reinforced concrete beam below or alongside the existing foundation, which transfers the load to a concrete base at a greater depth. This approach is often used where the foundation needs more extensive support. Lenders who accept underpinned properties will usually consider this method.

Mini-piled underpinning

Mini-piles are driven or drilled deep into the ground to reach stable strata, and the building load is transferred to these piles. This method is typically used where the ground conditions are particularly challenging or where access is restricted. Some lenders may view this as a more engineered solution and therefore take comfort from its use.

Resin injection

A more modern alternative to traditional underpinning, resin injection involves pumping expanding resin beneath the foundations to fill voids and stabilise the ground. While this method is increasingly accepted, some lenders may be less familiar with it and therefore more cautious. Having detailed documentation from the contractor and engineer is particularly important with this approach.

Regardless of the method used, lenders will want to see evidence that the work was carried out by a suitably qualified contractor, that it complied with building regulations, and that the property has been stable since the work was completed.

Documentation Required for an Underpinned Property

Thorough documentation is the key to a successful remortgage on an underpinned property. Lenders need to be confident that the work was done properly and that the property is structurally sound. You should aim to have the following documents available.

Building regulations completion certificate

This certificate from your local authority confirms that the underpinning work was inspected during construction and met the required building standards. This is one of the most important documents a lender will ask for, and its absence can make remortgaging significantly more difficult.

Structural engineer's report

A report from a chartered structural engineer detailing the reason for the underpinning, the method and extent of the work, and confirmation that the property is now structurally stable. If the original report from when the work was carried out is not available, you may need to commission a new inspection.

Contractor certificates and warranties

Records from the company that carried out the underpinning work, including any warranties or guarantees provided. Some underpinning work comes with insurance-backed guarantees, which can give lenders additional confidence.

Monitoring data

If level monitoring was carried out after the underpinning to confirm the property's stability, these records should be included. Most lenders expect to see at least 12 months of stable monitoring data following completion of the work.

Insurance confirmation

Evidence that your buildings insurance covers the property including its underpinning, with no exclusions for subsidence or structural movement. If you have had to use a specialist insurer, provide full details of the policy.

Previous survey or valuation reports

Any previous surveys or valuations that comment on the underpinning can be helpful in demonstrating a consistent picture of stability over time.

Finding the Right Lender for an Underpinned Property

Not all lenders take the same approach to underpinned properties, so finding the right one is an important part of the process. The lending market can be broadly divided into three tiers when it comes to underpinning.

Lenders who decline underpinned properties

Some lenders have a blanket policy of not lending on properties that have been underpinned. These tend to be lenders with highly automated underwriting processes who prefer to avoid any non-standard risk. There is little point applying to these lenders, as the decision is unlikely to change regardless of your documentation.

Lenders who accept underpinned properties with conditions

A significant number of lenders will consider underpinned properties, but they will have specific conditions that must be met. These typically include having a building regulations completion certificate, a structural engineer's report confirming stability, adequate insurance cover, and a minimum period of post-work stability. This is where the majority of successful remortgage applications on underpinned properties are placed.

Specialist lenders

For more complex cases where documentation is incomplete, the underpinning is relatively recent, or there are additional complicating factors, specialist lenders may be the best option. These lenders have the expertise to assess individual cases on their merits and are comfortable with higher levels of risk. Rates from specialist lenders tend to be higher, but they can provide solutions where mainstream lenders cannot.

The value of a broker

Working with a whole-of-market mortgage broker who has experience with underpinned properties is strongly recommended. They will know which lenders fall into each category and can match your specific circumstances to the most suitable options. This saves time, avoids unnecessary credit searches, and gives you the best chance of a competitive deal.

Insurance Challenges and Solutions

Securing appropriate buildings insurance is a crucial step when remortgaging an underpinned property. Without adequate cover, no lender will proceed with your application. Here is what you need to know about insuring an underpinned home.

Standard insurance market

Some standard home insurance providers will cover underpinned properties, though they may charge higher premiums or apply a larger excess for subsidence-related claims. When shopping for insurance, be transparent about the underpinning history, as failing to disclose this could invalidate your cover.

Specialist insurance providers

If you are struggling to find cover on the standard market, specialist insurers who deal with non-standard properties can often help. These providers understand underpinning and subsidence risk and can tailor policies to your specific situation. While premiums may be higher than standard policies, they can provide the comprehensive cover your lender requires.

What your lender needs to see

Your mortgage lender will require buildings insurance that covers the full reinstatement cost of the property, including the underpinned foundations. The policy should not exclude subsidence, heave, or landslip. Some lenders may also want to see that the insurer has been informed about the underpinning and has accepted the risk.

Tips for reducing insurance costs

Having comprehensive documentation of the underpinning work, including warranties and monitoring data, can help when negotiating with insurers. Some insurers offer lower premiums if the property has been stable for a longer period or if the underpinning was carried out under a recognised scheme with insurance-backed guarantees. Comparing quotes from multiple providers, including specialist brokers, is always worthwhile.

Practical Tips for Remortgaging an Underpinned Property

If you are preparing to remortgage an underpinned property, these practical steps can help improve your chances of success and secure the best available deal.

Start early

Give yourself plenty of time before your current mortgage deal expires. Remortgaging an underpinned property typically takes longer than a standard application, so starting six months or more in advance is advisable. This allows time to gather documentation, commission any necessary reports, and find the right lender.

Fill any documentation gaps

If you are missing key documents such as a building regulations certificate or structural engineer's report, address this before you apply. Commissioning a new structural assessment can cost a few hundred pounds but can make the difference between a successful application and a declined one.

Consider a product transfer

If you are already with a lender who accepted your property with its underpinning, consider staying with them and switching to a new product rather than moving to a different lender entirely. Product transfers are often simpler and may not require a new valuation, which avoids the scrutiny of the underpinning by a new surveyor.

Maintain your property

Ensure that any cosmetic damage associated with the original subsidence or underpinning has been repaired. Visible cracks or uneven floors will concern a surveyor, even if they are purely cosmetic and not indicative of ongoing movement.

Manage trees and vegetation

If tree root activity was a factor in the original subsidence, ensure that any tree management recommendations have been followed and are ongoing. The surveyor may comment on trees near the property, and evidence of proactive management demonstrates responsible ownership.

Be honest and proactive

Disclose the underpinning from the outset and provide your documentation proactively. Trying to hide the history will only cause problems later when the surveyor identifies the work or the lender discovers it through other checks. A well-presented, transparent application is far more likely to succeed.