Japanese Knotweed Mortgage
Morgan Stewart shares his expertise on Japanese Knotweed, and why this menacing plant could affect the mortgage process.
What is Japanese Knotweed and can you get a mortgage on a house with this?
Japanese Knotweed was brought to the country from Japan where it grows natively. It’s actually edible, but the Victorians brought it over mainly to make our railways look pretty.
It’s a fast-growing plant that reaches quite high. It’s an invasive species, because it grows like wildfire and its roots spread rapidly underground as well. It looks a little like bamboo, although it’s not closely related.
The problem with Japanese Knotweed is that it grows through brickwork and can damage properties. It’s also very hard to get rid of. Even if you remove the soil and get all the roots out, it often comes back the next year. Because of that, you have to be licensed to remove it. You can’t just go and dig it up and take it to your local tip – that’s actually illegal.
You can get a mortgage on a house with Japanese Knotweed but many lenders will say no straight away. It’s something that surveyors look out for when they assess a property.
Does it matter how close the plant is to your house?
There are different categories involved, numbered one to four. Category 1 is where the plant isn’t on your property but you can see it on a neighbouring property or land more than seven metres from your boundary.
Category 2 is where there’s no Knotweed on the property but it’s within seven metres of the boundary. With Category 3 it is present within the boundaries of the property but it’s more than seven metres from a habitable space, and with Category 4 it’s growing right next to your house.
What do I have to do if there’s Japanese Knotweed on or near my property?
When you’re selling a property you have to supply an information pack where you are legally bound to declare if you have Japanese Knotweed nearby. Hiding the fact, or cutting the plant down before sale, is a criminal offence.
From a property investor’s point of view, it could be fantastic because you can treat the infestation. You will probably get a good deal on a house – it’s a bargaining tool, and then you can get rid of the Knotweed and have a home at a good price.
Is Japanese Knotweed removal covered by home insurance?
No, it’s not unless it specifically states so in your policy. Generally it isn’t.
In terms of mortgages, if you can find a lender for the property and you have category 3 or 4 Knotweed, then you need to put a treatment plan in place. This is usually over 5 years.
There are various methods, but generally it requires a formal contractor who is licensed to remove Japanese Knotweed. They will inject the stems with chemicals and return frequently to repeat the treatment over a five year period. But there are lenders out there who will lend on category 3 or 4.
How much does it cost to get rid of Japanese Knotweed?
It will depend on how bad the infestation is and the size of the area that’s covered. Generally it will range from around £1,500 to £5,000. The contractor might have to move earth away as well as inject the stems. The treatment will vary depending on the situation.
Can you give an example of a client with a Japanese Knotweed issue?
We had a client come to us who had bought a property at auction. The lender did a desktop valuation – which means a surveyor didn’t go out to the property. Everything seemed to stack up and the client took out bridging finance to buy the house.
A few months later they wanted to mortgage the property. The survey found that the vendor had hidden Japanese Knotweed beyond the fence – they had cut it down before the auction. By the time summer came, there was a massive infestation.
The client came to us because they couldn’t get a mortgage anywhere else. Everybody was saying no and they were stuck on an expensive bridging loan which was about to expire.
Fortunately, we managed to place them with a specialist lender and they got a treatment programme in place. They paid off the bridge in time. So it is possible.
My advice is that if you’re going down the route of a desktop valuation, make sure you go and have a look at the property. Check out the area – in certain parts of South Wales, parts of Swansea and Cardiff Japanese Knotweed is everywhere because of the railways in that area.
The main point is that it’s important to be aware of Japanese Knotweed, but don’t be too afraid of it – it could mean you’re able to pick up a bargain. If you know how to treat it and finance it then you can get a property at a good price.
It could be part of an investment Strategy – we have clients that specifically do that. They will go and look for properties with Knotweed because they know that there will be less competition for those properties.