This week’s episode of Rip Off Britain revealed that some lenders are now refusing to secure mortgages against properties in close proximity to mineshafts – creating new challenges for conveyancers and trapping homeowners in houses they’d previously had no problems buying.
The Rip Off Britain episode first aired on BBC1 on 17th October 2017 and followed the case of Sharon who had been struggling to sell her home for 3 years. Buyer after buyer pulling out at the last minute had been a mystery, until one revealed that banks were refusing to lend against the property after local searches highlighted a mineshaft underneath the neighbouring house.
Even though the mineshaft had caused no damage to her house, Sharon was given no choice but to put her house up for auction with a reserve price that was £61,000 under market value. Even then, the property remained unsold.
Over 130,000 properties in the UK are within 20 metres of a mineshaft
Unfortunately, this is just the tip of the iceberg. Many more sellers and their conveyancers could find themselves in a similar situation, as Tom Backhouse CEO and Founder of Terrafirma explained:
“There are over 130,000 properties in the UK within 20 metres of a mine shaft, so historically the banks acted on a yes/ no response against “is there data or not?”. That doesn’t work anymore.
A lot of the time these mineshafts aren’t actually there. When something is flagged on a report, it is just data (that in some cases can be 150 years old). The report doesn’t look into whether the mine entry is gone or not.
In Sharon’s case, a specialist excavation report could be ordered to drill into the ground to reassure lenders, but this could cost up to £5,000 – and reveal the mineshaft does exist.
Overall, banks need to take a more nuanced approach and act on risk assessment. We have the technology. We can proactively go out and find mineshafts and take action to ensure they are not going to cause any problems in the future.”
Homebuyers need to ensure their conveyancers are carrying out relevant searches
Homebuyers need to ensure their conveyancers are carrying out relevant searches to ensure they are aware of any risks relating to a property, as UK Finance commented:
“While most old mine shafts don’t cause a problem for properties nearby, anyone considering buying close to one should ensure that the relevant searches are done and that there’s been a proper assessment of the risk.”
TerraSearch® analyses coal mining risks alongside an additional 55 mining hazards to reveal a fuller picture of ground stability in our towns and cities
Drawing on Terrafirma’s specialist knowledge in the innovation and provision of mining-instability risk assessment, the TerraSearch® product suite analyses coal mining risks alongside an additional 55 mining hazards to reveal a fuller picture of ground stability in our towns and cities.
The following TerraSearch® products are now available on tmconvey to order against residential and commercial properties :
• TerraSearch® Coal Extra is a regulated ‘Con29M-Compliant’ coal mining search offering an equivalent to the Coal Authority report, including a professional opinion of all coal mining risks and CON29M questions and additionally alerting to 55 further mining hazards.
• TerraSearch® Assess is a single search that comprehensively assesses the risk to a site (property and land) from all 60 mining hazards, including past, present and planned extraction.
Both TerraSearch® Coal Extra and TerraSearch® Assess include additional professional interpretations, as well as a TerraSearch® Coal & Brine Report Indemnity Policy up to £50,000 loss in market value of the property (in the event that a conclusion changes based on the addition of new data), and £10 million liability per report in the event of wrong or missing information.
TerraSearch® Coal Extra and TerraSearch® Assess are also supported by a TerraSearch® Alert, which is now available on tmconvey.
For more information, book your place at one of our Risky Business Roadshows this November to discuss your challenges with Tom Backhouse in person.
You can also watch a replay of Rip Off Britain here, or read this blog post on Are sinkholes in the headlines finally revealing the truth about mining risks?.
Image credit : BBC1’s Rip Off Britain