How to upgrade this patio?

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I’d like to upgrade my patio with flagstones of some kind. Currently its concrete pavers layed onto grey gravel and probably sand. In the area highlighted top right the patio has sunk by up to 10cm. There is a sleeper retaining wall at the top and right. I want to extend the patio all the way across the house to cover a manhole which is circled (under astroturf currently) . Maybe edge with a row of sleepers.

I know setting into mortar will be longer lasting, but I’m a but concerned about not having drainage i to the subsoil near the house as my house is on a slope (down to the right of the pic) and the area is probe to subsidence. Also as the sand/ gravel is already there i thought I could just swap out the slabs with a bit of levelling.

Am I wrong to worry about the soil near the house getting dry? Although it might actually be quite wet as its cut into the hill. There were issues with damp floors in the house in the past. I’m not clear where a patio set into mortar would actually drain to. Is there any drainage through mortar at all?

Not sure how to proceed.

 

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Any ideas?

 

[Mike13]

If you put a decent "fall" away from the house then water wont pool on the patio. A drier soil under the house helps a little bit with the heating bill. just plan it carefully and use a wacker plate, or if on a budget, then one of these from somewhere a bit cheaper:

Digging Bar 7.7kg - 1.83m (17lb - 72 )

Digging Bar 7.7kg - 1.83m (17lb - 72 )

www.challengefencing.com

or https://ehsmith.co.uk/product/faithfull-1500mm-17lb-post-hole-digging-bar-long-shank/
The round end is slow, but useful in tight corners etc.
Dont forget you will need to lay another course or two of bricks to raise the manhole cover. up to patio level, you can get covers that you can inset the paving.