Why it's never easy to sell a pup

Since I last wrote about my brush with subsidence, my flat in North London has been underpinned and redecorated from top to toe. So you'd think I'd be sighing with relief at the end of the story.

Not quite, because there never really is an end to a subsidence story. I have simply changed from being a crack victim to the woman who owns a 'pup'. And I don't mean I've bought a cute chihuahua like Paris Hilton's. No, my home is now known as a 'previously underpinned property'.

According to the Subsidence Claims Advisory Bureau, the real problems after remedial work can start when you want to sell. 'A purchaser of a property that has previously suffered from subsidence can have great difficulty in obtaining buildings household insurance ... and without "full perils" cover (subsidence, landslip and heave) mortgages will not be granted.'

How can that be? I've just had £60,000 worth of work done. My home must be the least at risk in the universe. Isn't it a great bet?

Apparently not. Malcolm Tarling of the Association of British Insurers says that pups are unloved because of the fear of subsidence recurring (though no one seems to have figures for recurral rates). And this stigma stays with the property indefinitely.

John, a manager, lives in north Kingston, Surrey, with his wife and two teenage sons. Their house was underpinned more than 10 years ago and has had no problems since. However, he has no subsidence cover. 'With some companies I've called, telling them my postcode was enough to get me refused.'

If John and his wife want to sell, a buyer will find it difficult to obtain conventional cover. Not good, when for most of us our homes are our biggest assets.

If, as according to insurers More Than and Esure, almost 4 million homes across the UK are identified as being at risk, John could be one of a number of homeowners with an albatross around their necks. This is particularly worrying if we have another long hot summer - claims totalled £390 million after 2003.

And why is costly remedial work not the end of the matter? Robert Withers of the Association of Specialist Underpinning Contractors admits he does find it 'a bit bizarre' that the insurance industry pays all this money, then regards repaired properties with suspicion; after all, contractors in ASUC offer a 12-year guarantee.

But he points out that insurers often opt for partial underpinning, for example just around a bay window, to limit the cost and disruption, leaving the fear that some other part of the house may subsequently subside.

So what can you do if you live in, or want to buy, a pup?

First, says ABI's Tarling, when you have the work done, request that your existing insurer keeps you on, even if this involves a higher excess and premiums. Our insurer, Norwich Union, has agreed to this.

Nikki Sellers, head of home insurance at Esure, goes further, suggesting that when you come to sell, your buyer should also approach your insurer and will usually be accepted.

But if, as happened to John, this is not an option, you may need to find a specialist in post-subsidence properties. The Subsidence Claims Advisory Bureau has its own scheme, which involves paying £146 for a survey, refundable bar £25 if insurance is not given, and there are other specialist insurers.

And what of the future? Millions of potential sufferers, some of whom simply share a postcode with victims, could encounter headaches in the long term. If our climate becomes warmer and dryer, who knows how many of us could be affected? Hosepipe bans are already in force this year in some parts of the country due to lack of rain. As Tarling concedes: 'Potentially there's an issue out there.'

Insurers and lenders may have to think about the way they deal with the issue. For example, More Than would like to cut the number of houses identified as being at risk by using whole postcodes instead of just the first three digits. This would be a start and might, at least, strike some of our neighbours off the list.

And then, most important, there is prevention of subsidence. Sellers says that Esure noticed an increase in the number of calls in March. But inspectors found that most cracks turned out not to be subsidence. 'That's good,' she says, 'because it shows there is growing awareness of the symptoms.'

So hopefully more householders will now prune trees and shrubs, update drains, scour their walls for cracks - and avoid the consequences. However, for others, there seems little hope of escaping that sinking feeling.

Contacts

Subsidence Claims Advisory Bureau 01424 733727; Bureau Insurance Services 01424 733727; Woodstock Insurance Brokers 01732 223440; Adrian Flux Insurance 08000 838833