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Our home has subsidence, why didn’t our mortgage valuation spot it?

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My partner and I have discovered a major issue with our new home, which we bought in November last year. 

When we got builders in to quote on a kitchen remodel, they noticed structural issues including a sloping floor and cracked walls, which had been patched over. 

We then sought advice from a structural engineer who told us we have subsidence. 

They said this started in an extension at the back of the property, and is now affecting the rest of the house. 

This will need to be fixed urgently, and the cost of will be substantial as it involves knocking down and rebuilding the extension.

Cracking up: Subsidence is thought to affect up to 20 per cent of properties in England and Wales, according to property search company, OneSearch Direct

Cracking up: Subsidence is thought to affect up to 20 per cent of properties in England and Wales, according to property search company, OneSearch Direct

The extension was built in 2008 and had building regulations at the time, which were confirmed by our solicitor at the time of purchase.

This afternoon we called Virgin Money, our mortgage provider, as we felt let down by the fact their surveyor did not identify this when granting the mortgage. 

It only conducted a desk-based survey and was therefore never going to identify such an issue. Virgin Money said its only responsibility in surveying for a mortgage is to value the property and not assess it from a structural perspective.

But as subsidence could substantially devalue the house, surely mortgage lenders should carry out proper checks? 

Is there any other avenue we ought to explore here? Should we be asking the local council how this has happened if it has building regs? Or should the seller have declared it? Via email.

Ed Magnus of This is Money replies: This is a brutal situation and desperately unlucky. Of all the problems for a homeowner to confront, subsidence is one of the worst. 

The idea of dismantling and rebuilding an entire extension is enough to make anyone regret a property purchase. 

Our reader appears to have relied on the mortgage valuation rather than arranging their own independent survey.

What is subsidence?

Subsidence occurs when the ground beneath a building sinks, causing the foundations to move.

It typically happens as a result of hot dry weather, or the presence of trees or shrubs causing the soil to lose moisture.

Cracks in your home’s walls, either in the internal plasterwork or external brickwork can be a sign of subsidence, though they are not always. 

The cracks tend to be diagonal, wider at the top than at the bottom, and thicker than 3mm (or a 10p coin).

Unfortunately, a basic mortgage valuation is carried out for the lender’s purposes only, and not on the behalf of the borrower. It should therefore never be relied upon to detect issues with the property.

This is because it is only designed to check the property fits within the lender’s criteria, and that the amount being paid represents market value.

Every lender will require some type of valuation but this will vary from a full, in- person valuation to an online assessment, known as an automated valuation model (AVM).

Unfortunately, our reader received an automated valuation. This would have been calculated by comparing online data for sold prices in the immediate area.

If the property had received an in-person check-up, there is a chance that the subsidence would have been spotted.

Every home buyer would always be wise to arrange their own building survey. Unlike with a mortgage valuation, a surveyor’s job is to inspect the property’s condition so that the buyer is made aware of any potential issues.

It isn’t a legal requirement, but without one, you could be left unaware of all manner of costly problems that may be lurking within, such as subsidence.

Better safe than sorry: After having an offer accepted on a property, buyers have the option to organise an independent survey before contracts are exchanged

Better safe than sorry: After having an offer accepted on a property, buyers have the option to organise an independent survey before contracts are exchanged

The reader did not say whether they organised their own survey. If they did, they may have a claim against the surveying company.

We contacted Virgin Money about this situation. A spokesperson from the lender said: ‘Every mortgage application requires the property to be valued. 

‘A number of factors including loan amount, loan-to-value and property type impact the type of valuation we use. This could be either a physical valuation or desk-based. 

‘A structural survey is not the responsibility of the lender, but we do advise customers to arrange for one to be carried out independently, for their own peace of mind or if they have any specific concerns.’

How to fix subsidence

Subsidence should be something that is covered under your home insurance policy. This means, bar the excess, you should be able to avoid the cost of remedying it.

In some cases underpinning will be required. This is when extra support is added beneath a building to prevent it from sinking into the ground.

Careful check: A good surveyor should notice issues outside the property, as well as within its walls

Careful check: A good surveyor should notice issues outside the property, as well as within its walls

It’s an expensive undertaking and the cost will vary depending on the method used, the location, the size of the area, the type of property and whether the building is on a slope.

The average cost of underpinning, according to Checkatrade, is between £1,500 and £2,600 per m2.

There are also a number of extra costs that will need to be factored in on top of the work itself. 

If you live in a detached or semi-detached property, party wall agreements will sometimes need to be drawn up between you and your neighbours by a surveyor.

Before you begin work, you’ll need to notify and pay your local building control office. The cost will vary from council to council.

You may also need a structural surveyor, a building contractor, or a tree surgeon.

In the case of our reader, as they will be required to knock down the entire extension and start again it will cost quite a lot more.

The average cost for a 20m2 extension is £37,500, according to Cheackatrade – and that does not factor in the demolition and removal of the original extension.

To help advise our reader further, we spoke to Grant Barnes, a chartered surveyor at Barnes and Barnes surveyors, David Hollingworth, associate director of mortgage broker L&C Mortgages and Paula Higgins, founder of the HomeOwners Alliance.

We also heard from a spokesperson from the insurer Aviva, and from Chun Wong, a partner at the legal firm Hodge Jones & Allen.

Can mortgage lenders be expected to spot issues? 

Grant Barnes replies: I am sorry to hear that your reader has come into difficulty caused by subsidence affecting their extension and rest of the house.

Essentially, the issue here is one which has been raised on many occasions by purchasers who have sought to rely on a valuation rather than a survey.  

It should be remembered that its inherent value is not just the ‘bricks and mortar’ but also the land itself that can typically range from 40 per cent to 45 per cent of the overall value.

For this reason, most banks will explicitly state that the customer should not seek to rely on the banks’ valuation to confirm the property is in good condition or warrant that it is structurally stable.

David Hollingworth adds: Even a basic valuation that is conducted in person isn’t designed to protect the buyer. As the name suggests, it is there to give a valuation for the lender’s purposes.

Borrowers are advised to go for a more in- depth homebuyer’s report, or a full structural report, to get a deeper insight into any issues with the property.

These more in-depth reports come with a higher cost than a basic valuation, which could even be free as part of the overall mortgage deal.

However, it can be money well spent, as it should raise any potential issues before the purchase is final and buyers can go in with their eyes open.

Why was an automated valuation used?  

Grant Barnes replies: The customer will likely have been warned as to the potential risks of not arranging a survey, particularly if they were aware that the mortgage was based upon a desktop valuation.

In the past most lenders carried out a physical inspection of the property.

Valuation automation: A desktop valuation is an automated computer valuation achieved using online property data, recent comparable sales and property listings

Valuation automation: A desktop valuation is an automated computer valuation achieved using online property data, recent comparable sales and property listings

However, the use of desktop valuations has become more prevalent in recent years as they are cheaper, can be completed faster and bypass many of the challenges that can slow down a full appraisal.

Desktop valuations are mostly preferred for lower-risk of loans.

What may have caused the subsidence in this case?  

Grant Barnes replies: The extension may well have received building regulation approval in 2008.

However, there are a number of factors that can subsequently affect the property and cause ground instability.

For example, subsidence is an issue known to increase when there are long spells of dry and hot weather.

Mind the gap: Cracks in your home's walls, either in the internal plasterwork or external brickwork, can be a sign of subsidence

Mind the gap: Cracks in your home’s walls, either in the internal plasterwork or external brickwork, can be a sign of subsidence

The predominant cause of subsidence in the UK is soil shrinkage; accounting for approximately 75 per cent of all subsidence claims.

This can be caused by the influence of tree roots in clay soil. Leaking drains and pipes are also a causal factor of subsidence, accounting for about 15-20 per cent of subsidence incidents.

Will this definitely be covered by their insurer?  

A spokesperson for Aviva replies: Most household insurance policies will cover loss or damage caused by subsidence as standard, but some insurers may decline to insure properties with a history of subsidence.

All insurers will ask about any history of subsidence when a customer applies to take out cover. 

Terms vary between insurers, and the outcome of a claim will very much depend on individual circumstances and insurers.

Any claim would be investigated before a decision would be made. In this case, we would suggest that the customer speaks to their insurer, who could then assess the situation and any potential claim.

What should our reader do next?   

Paula Higgins replies: I’m afraid to say that they won’t get anywhere with their lender.

If they did get their own building survey, they may have a case against their surveyor.  

I think they should also ask an insurer for their opinion as I expect that is the route they need to take.

But be aware it will become difficult to change insurers as others won’t take on properties with known subsidence. Premiums will likely go up too.

I would also be wary about going to the council – unless it is to confirm that there has been a building regs sign off. The council could demand the new owners put things right if it is an unsafe structure.

The subsidence may have happened after the extension was completed, and the extension could very well have met the building regs at the time.

Finally, it does sound like they may have a case against the sellers if they lied on the TA6 form.

Nightmare: The average cost of building a 20m2 extension is £37,000 according to Checkatrade. Our reader will have to knock down the existing extension before starting

Nightmare: The average cost of building a 20m2 extension is £37,000 according to Checkatrade. Our reader will have to knock down the existing extension before starting

The TA6 Property Information Form is completed by you when you’re selling your home. It’s designed to give the buyer important information on the property.

This includes boundaries, any disputes and complaints with neighbors, planning notices and proposals, guarantees and warranties (for underpinning for example), as well as environmental maters such as whether flooding as impacted the property or if Japanese Knotweed has been detected or treated in the past.

Unfortunately, I don’t believe there is a specific question asking to disclose subsidence.

Grant Barnes adds: It may be worth speaking to a legal adviser to investigate whether there may be possible to seek damages from the seller. 

However, this may be difficult to prove – particularly as the buyer alone is responsible for assessing the quality of a purchase before buying. 

Is there a legal claim to be had?

Chun Wong replies: It is not clear what has caused the subsidence since the extension in 2008. This will need to be investigated first.

In terms of the valuation, the question is whether it was reasonable for the mortgage lender to have conducted only a desktop valuation at the time taking into account all the relevant information. 

We suggest a full file of papers is obtained from the conveyancing solicitors and local authority. 

They should also check to see if they have the benefit of legal expense insurance, which may provide cover for legal costs in these circumstances.

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

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Rishi Sunak’s swimming pool complex at his manor house is pictured as he tries to become the next PM

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Rishi Sunak‘s lavish private swimming pool complex at his North Yorkshire manor house has been pictured as he continues to battle Liz Truss to become the next Prime Minister.

The former Chancellor of the Exchequer, who like Ms Truss is facing questions over how they will deal with the ongoing cost-of-living crisis and spiralling energy prices, has spent £400,000 on the new pool.

He is also building a gym and tennis courts at the £2million Georgian manor near Northallerton, with reports from earlier this year estimating he would have to pay £13,000-a-year to keep the new pool warm. 

However, this figure may have risen dramatically over the last few months as energy prices have continued to surge, putting millions of people in the UK at risk of not being able to pay their bills.

Yesterday Mr Sunak, who has been criticised for building the pool while his local swimming baths in Richmond are forced to close due to rising energy bills, pledged to spend billions more to help people with the cost-of-living crisis.

The former investment banker, who made a fortune before becoming a politician, said there was a ‘moral responsibility’ to offer extra help, while also taking a swipe at Ms Truss’s plans to cut taxes.

He pledged to give more help to pensioners and those on benefits, while also vowing to cut VAT on energy bills – which he said could raise total support for families to around £700 to £800 – while energy bills look set to reach an eyewatering £4,400 after Christmas.

A gym, tennis court and swimming pool complex at Rishi Sunak's North Yorkshire manor house has taken shape after months of construction

A gym, tennis court and swimming pool complex at Rishi Sunak’s North Yorkshire manor house has taken shape after months of construction

The Tory leadership hopeful is thought to have spent in the region of £400,000 on the extension to his Georgian Grad2-II listed property

The Tory leadership hopeful is thought to have spent in the region of £400,000 on the extension to his Georgian Grad2-II listed property

It comes as Mr Sunak, pictured here in a visit to St John's Wood Synagogue yesterday, continues his quest to become the next Prime Minister

It comes as Mr Sunak, pictured here in a visit to St John’s Wood Synagogue yesterday, continues his quest to become the next Prime Minister

The swimming pool at his Grade-II listed manor house, where he typically spends his weekends with his wife and two daughters, has been under construction for several months.

The 42-year-old applied to the local council to build an L-shaped pool house, which will include a hot tub, utility and changing area and plant room, last year.

These plans, which included a 12-metre by five-metre swimming pool, were later approved by the council.

No tax payer money is thought to have been used in building the complex, and there were no objections from people living nearby. 

Reports it would cost £13,000-a-year to heat did not go down well among members of his constituency, especially after the sharp rise in energy bills.

The 42-year-old applied to build an L-shaped pool house, which will include a hot tub, utility and changing area and plant room, last year

The 42-year-old applied to build an L-shaped pool house, which will include a hot tub, utility and changing area and plant room, last year

It will include a tennis court (which can be seen in the bottom half of this picture), as well as an indoor private swimming pool

It will include a tennis court (which can be seen in the bottom half of this picture), as well as an indoor private swimming pool

No tax payer money is thought to have been used in building the complex, and there were no objections from people living nearby before it was approved by the local council last year

No tax payer money is thought to have been used in building the complex, and there were no objections from people living nearby before it was approved by the local council last year

Retired steel worker Leslie Porter, 69, told the Mirror: ‘Some people are having to choose between heating and eating. Bills are all rising and he does this. It’s obscene.’

Receptionist Hayley Hadden added: ‘He is a millionaire many times over and it looks like he is rubbing our noses in it. He doesn’t have to worry about paying his bills.’

It is one of a number of properties owned by Mr Sunak and his wife Akshata Murthy, who is the daughter of one of the richest men in India.

While he was chancellor the family lived in a flat above No 10 Downing Street, but earlier this year they moved to their £6.6 million mews house in Kensington.

The L-shaped pool house, which is under construction after permission was given last year, is set to inlcude a hot tub, utility and changing area, and a plant room

The L-shaped pool house, which is under construction after permission was given last year, is set to inlcude a hot tub, utility and changing area, and a plant room

Reports it will cost £13,000-a-year to heat did not go down well among members of his constituency, especially after the sharp rise in energy bills

Reports it will cost £13,000-a-year to heat did not go down well among members of his constituency, especially after the sharp rise in energy bills

Work has  started on construction of the swimming pool, gym and tennis court at the Sunak's North Yorkshire manor earlier this year

Work has  started on construction of the swimming pool, gym and tennis court at the Sunak’s North Yorkshire manor earlier this year

They also own a £5.5 million home in Santa Monica in California, where Mr Sunak has been tipped to live if he decides to quit politics in the UK.

Mr Sunak, who worked as an investment banker for firms California, India and Britain, including Goldman Sachs, is known to use the Yorkshire property when Parliament is not in session and he doesn’t need to be in London.

As his battle to become the next Prime Minister with Ms Truss heats up, this week the pair exchanged a series of barbs over their approach to the cost-of-living crisis.

The ex-chancellor has been accused by his rival’s camp of ‘Gordon Brown-style politics’ with a ‘socialist tax and spend’ agenda.

In a swipe back at the Foreign Secretary tonight, Mr Sunak suggested Ms Truss’s tax-cutting proposals were not ‘the moral thing to do’.

Rishi Sunak pledged to give more help to pensioners and those on benefits, while also vowing to cut VAT on energy bills to help with the cost-of-living crisis

Rishi Sunak pledged to give more help to pensioners and those on benefits, while also vowing to cut VAT on energy bills to help with the cost-of-living crisis

He also insisted that ‘starry-eyed boosterism’ would not steer the country through the inflation crisis.

In another jibe at Ms Truss, Mr Sunak claimed he would ‘rather lose’ the contest to become PM than promise ‘false things I can’t deliver’.

Both he and Ms Truss have faced calls to pledge further support during the cost-of-living crisis after energy bills for typical households were this week forecast to soar to more than £4,200 next year.

‘I do feel a moral responsibility as prime minister to go further and get extra help to people over the autumn and the winter to help them cope with what is going to be a really difficult time,’ Mr Sunak said.

‘I think that is the right priority.’

Mr Sunak suggested his rival Liz Truss's tax-cutting proposals were not 'the moral thing to do' as he took a series of swipes at the Foreign Secretary

Mr Sunak suggested his rival Liz Truss’s tax-cutting proposals were not ‘the moral thing to do’ as he took a series of swipes at the Foreign Secretary

The Foreign Secretary has faced pressure to match Mr Sunak’s promise of more direct support for families, after she previously steered away from pledging extra ‘handouts’ to ease the cost-of-living crisis.

Mr Sunak’s camp have accused Ms Truss of a ‘major U-turn’ after she today insisted she was not ruling out further cash payments.

But the Foreign Secretary has maintained that tax cuts – and boosting the economy – are her ‘priority’.

Ms Truss’s promise to cancel the National Insurance rise, scrap a planned increase in corporation tax, and remove green levies on energy bills appears to be proving popular with Tory members.

Mr Sunak has warned that Ms Truss’s tax-cutting plans will worsen the inflation crisis and cause interest rates to rocket.

He insisted he was ‘prepared to lose this contest’ rather than ‘saying the easy things’ and not staying ‘true to my values’.

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Window shopping: Stained glass or acoustic? Solid wood or plastic?

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Your front door isn’t there to keep people out, it’s there to welcome them in.

Along with the windows — those peep-holes into your life — the style and colour tell friends and strangers alike who you are and what they can expect when they set foot inside your home.

‘Windows can make or break a space,’ says luxury interior designer Katharine Pooley. ‘They often don’t quite receive the attention they should, which is a shame as with the right ironmongery and a beautiful finish they instantly upgrade the overall aesthetic.’

Inviting: Stained glass windows add colour and personality to a home and tell friends and strangers alike what they can expect when they set foot inside

Inviting: Stained glass windows add colour and personality to a home and tell friends and strangers alike what they can expect when they set foot inside

And yet we spend twice as long selecting a kitchen worktop than we do choosing windows for our house.

So what options do you have to make them pretty as well as practical?

Plastic fantastic?

First off, don’t go for those horrid brilliant white, smooth plastic frames for windows. They often look ugly.

If you have to get uPVC because you’re on a tight budget, then at least get them in off-white with a woodgrain effect — some brands are pretty convincing nowadays.

KJM does a good line — for a double-glazed casement in woodgrain-effect measuring 1,200mm x 630mm, the price is about £275 supply-only.

Heavy metal

The sleek, hip-kid-on-the-block, aluminium-framed windows look up-to-the minute.

And because metal is stronger than wood or uPVC, the frame will be much slimmer, so there’s a larger area for glass.

We’re used to a cool grey colour, but you can have the frames made in any hue you like. So you can have them in forest green, midnight blue or flame red.

The same windows as above in aluminium would be £515.

Colours: You can have window frames made in any shade you like, though grey is popular

Colours: You can have window frames made in any shade you like, though grey is popular

Picture windows

Oh, the fun you can have with stained glass. Coloured designs are usually banished to little fan-lights at the top of doors in late Victorian houses.

But why not have coloured or picture panels in your front windows. You can have a nautical theme if you live by the sea; or an abstract whirl of shapes and colours.

A window with a bespoke design from Cheam Leaded Lights of about 1,200mm x 630mm will cost in the region of £2,500 to £3,000 supply-only.

Modernist style

Crittall windows or doors feature a sharp Art Deco design with slim black steel frames divided into squares. 

They have had a style renaissance over the past few years, somehow looking both up-to-date and classic at the same time.

While the Crittall company still manufactures the official items, you can get them in the same style from a host of other firms.

Crittall’s windows range from £500 to £850 per square metre, including installation.

Upgrade your glass

You can get all sorts of special glass these days. If you live by a busy road, acoustic glass will do better for you than standard double glazing.

Double glazing has two panes of glass with a void between them, whereas acoustic glass has two panes sandwiched together with a thin plastic layer in the middle to filter out more sound waves. 

Polarised glass keeps out the sun’s rays on hot days. And reflective glass turns windows into a one-way mirror so you can look out but passers-by can’t look in. 

Roseview’s Ultimate Rose windows are made from uPVC, but almost indistinguishable from wood.

A 1,200mm x 630mm acoustic glass window costs about £900 supply-only.

Choose wisely: The right windows can make or break a space, according to interiors experts

Choose wisely: The right windows can make or break a space, according to interiors experts

Solid wood

Wooden windows are becoming harder to find as vinyl and fibreglass take over, but they’re durable and can be a charming addition to a home.

Wooden Windows make bespoke timber windows and doors. It’s worth matching the two; after all, there’s nothing quite like the feel of a solid wood front door thudding into place.

It says that your castle is now secure against all onslaught. They do take some maintaining, though — you will have to repaint every four or five years, and there’s the chance of warping, which could make it more difficult to close or lock.

Old English Doors do a good line in hand-made Georgian-style, six-panelled solid oak doors from £4,320 supply-only.

Savings of the week! Rugs 

Temperatures may still be soaring. But the predicted higher fuel bills in the autumn means finding ways to make your home more cosy should start now.

A rug pulls all the elements in a room together. It also provides a layer of insulation, trapping cold air underneath.

Faded: La Redoute’s version in red and blue, pictured, is reduced by 25%, from £59 to £230 (laredoute.co.uk)

Faded: La Redoute’s version in red and blue, pictured, is reduced by 25%, from £59 to £230 (laredoute.co.uk)

Some heartwarming bargains of as much as 50 per cent off are available which, with care, should keep you snug for years. 

The abstract pattern Kista from West Elm in pale grey, blue and yellow would suit a stripped-down decor. It now costs from £112.95 to £519.95 (depending on size) down from £449 to £1,039 (westelm.com). 

The Pollo from The Rug Shop UK is in the same style. It costs from £71 to £224, reduced from £79 to £249 (therug shopuk.co.uk). At Loaf, the Tufty in cream and white is down 50 per cent from £345 to £175 (loaf.com).

The Habitat Byron in dark and pale grey, orange and teal would add zing to neutral interiors; it’s down by one-third to £119.99 (argos.co.uk).

Faded antique-style rugs continue to be fashionable. La Redoute’s version in red and blue, pictured, is reduced by 25 per cent; from £59 to £230 (laredoute.co.uk).

Anne Ashworth

 

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Liverpool ONE welcomes Tessuti (GB)

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Grosvenor has announced that designer retailer, Tessuti, has opened its new global flagship store at Liverpool ONE, demonstrating the brand’s ongoing vote of confidence in the destination. The new location on Paradise Street follows Tessuti’s consistently strong performance at Liverpool ONE and spans two floors measuring 22,000ft². Boasting Tessuti’s biggest store to date, this is four times the size of the previous Liverpool ONE site. The store interiors have been styled with a subtle nod to classic Italian architecture whilst incorporating state-of-the-art technical features, combining classic design with an industrial-chic colour palette and cutting-edge digital screens. Working with local Liverpudlian digital and production agency Liquid, the new Tessuti store has exclusive instore stills and videos showcasing exciting campaigns; the first of which is rumoured to feature Liverpool stars Stephen Graham, Abbey Clancy, Miles Kane and Chelcee Grimes.

 

Aligning with Liverpool ONE’s community ethos, Tessuti’s new global flagship will also support the vibrant community in the heart of Liverpool, championing local businesses through collaborations, pop-ups, and in-store events.

 

Alison Clegg, Managing Director, Asset Management, Grosvenor, commented: “Tessuti’s commitment to Liverpool ONE, through its relocation within the destination and decision to make the new store its global flagship, strengthens our position as one of Europe’s leading retail and leisure destinations. The impressive growth trajectory of Tessuti within Liverpool is a great indication of the potential for success and expansion of other brands that join Liverpool ONE.”

 

Chris Rowan, Director of Brand & Customer Connection at Tessuti, added: “The opening of our global flagship at Liverpool ONE is a huge moment for us. Liverpool is an urban hub for international fashion retailers, so upsizing and relocating within the city’s leading retail and leisure destination was a natural next step. We feel confident that it is the ideal home for our flagship location, and are excited to offer Liverpool ONE’s visitors our most stylish project yet.”

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