Getting to the Bottom of Subsidence and Property Insurance

The dreaded words “hosepipe ban” and “drought” have already been uttered in areas such as north west England, as a lack of rain, in spring 2025, has left reservoirs way below their usual seasonal height.  So does this signal the likelihood of a surge in property subsidence claims on property insurance policies in 2025 and what can property portfolio owners do about it?  Here is some guidance from the specialist property insurance team at Octo Insurance Brokers.

Which properties might need to call on their property subsidence insurance?

The first thing to note is that high-rise blocks of flats or offices are unlikely to suffer subsidence.  Such blocks are constructed with a steel or concrete frame and construction companies will typically have factored in the local geological conditions, whilst engineering the solution most appropriate for their foundations.

The same is not true of low-rise blocks, of which the UK has many that are up to five-storeys high and which would be built with traditional foundations.  Here, just as with domestic properties, subsidence can be a real issue, particularly when the property is constructed in an area where the prevailing soil type is clay.  Landlords owning these types of property should definitely check their property insurance policies offer robust protection in the event of subsidence.  Some insurers will exclude subsidence for certain areas that are known to have property subsidence issues.  Is yours one of them?  Have you just not noticed the exclusion?

The prevalence of clay soils and trees in property subsidence claims

London Clay is the geological soil type across the northern part of London and parts of Kent and other clay soils predominate in counties across the South East.  Other areas known for their clay soils are some south coast counties, Humberside and the North East coast.  The Midlands has its fair share of clay soil and so too do parts of the South West.  Here, premiums on property insurance policies may well reflect a greater risk of suffering property subsidence.

What many properties will also have are nearby trees, either on the property or local to it. When those trees are too close to the property, they too can be a major cause of subsidence.  Major culprits here are species such as willow, oak and poplar – trees with long, fine root structures.

What causes property subsidence?

To understand why soil and trees are such an issue, you have to understand the importance of moisture content.  In hot weather, moisture is taken out of the ground, causing clay soil to shrink. That same situation occurs when a tree is drinking up too much water from clay soil.  Then, when water returns to the soil, it will expand, causing another shift in the ground conditions, which can impact and move the property’s foundations.  

This continuous process eventually produces some tell-tale signs of property subsidence, such as diagonal cracks in walls, wallpaper that is ripped but not as a result of dampness, and frustrating doors and windows that just will not close properly.  

The minute such situations arise, property owners are well-advised to get things checked out and quickly inform the insurer providing their property insurance policy.

What else can contribute to property subsidence?

Climate change and the arrival of more heatwaves in the UK is exacerbating this problem.  In fact, in London alone, it is said that 40% of homes could be affected by subsidence by 2030.  It may become difficult, if not impossible, for some property owners to get property insurance coverage if this is the case.

Floods and storms can also make property subsidence matters worse, by washing away soil fines and creating mini-voids in the soil structure.  Once created, these can become enlarged over time, causing property to sink into them.

Water leaks can act in a similar way, so damaged drains and leaking overflows are another problem, with the leak again washing soil away from a building’s foundations.

How to respond to property subsidence

Acting as fast as possible is essential.  Although a property insurance policy often comes with a compulsory subsidence excess that is higher than the voluntary excess, the property owner or landlord should not be deterred from contacting their insurer.  The faster things can be addressed, the better.  

Action required might involve underpinning the property and having to move tenants out for a while.  This is again a good reason to ensure that subsidence coverage is robust, so that the costs of alternative accommodation are covered.  

Preventative maintenance 

Prevention is often better than cure, and landlords should keep a watchful eye on their properties and their structural integrity. This means looking out for the tell-tale subsidence signs we mentioned but also engaging in proper tree maintenance.  This does not necessarily mean cutting down trees that are very close to buildings, as that in itself can cause more issues within the ground.  It does mean working with a good tree surgeon and getting their assistance with managing the tree growth.

Another thing to do is to is to watch out for any unexplained upswing in water consumption, which might indicate an underground leak.  As part of the maintenance programme, a landlord should regularly inspect drains around their properties, checking they are free-flowing.  All that takes is a lifting of the manhole cover.  

Keeping drains and gutters unblocked and removing autumn leaf build-up – or snow, in cases of heavy snowfall – is also important.  Not having overflows pouring water down into the area outside the building should also be the objective.

During any scheduled window maintenance, there is an opportunity to look out for cracking around the frames. However, tenants should also be briefed on the need to report any cracks, sticking doors or windows, or floor sinkage, so the landlord is kept fully informed of any issues at an early stage.

Get the right property insurance to protect against subsidence losses

If you do have to call on your subsidence cover, it will not be cheap to fix the issue, which is why having the right property insurance policy and protection is vital.  Talk to us today about how to best protect your low-rise block or multiple-dwelling property portfolio, to avoid that sinking feeling, should things go wrong.  

Call the Octo Insurance Brokers team on 020 4576 4092 and let us get the right cover in place before the next subsidence surge starts to materialise.

Author bio: This Octo insurance article has been produced by Richard Davis, a property insurance broking specialist with over 40 years’ experience in the Scottish insurance and UK insurance markets.