Summer’s finally here and the seasonal surge in homes being put up for sale has begun too. But rising temperatures also bring with them the scourge of the British homeowner – the dreaded Japanese Knotweed.
It’s plant that can knock thousands of pounds off the value of your home and make buying, selling and remortgaging a nightmare.
What is Japanese knotweed?
The plant’s real (Latin) name is Fallopia Japonica and it arrived from Japan in 1825 as an ornamental plant.
Japanese knotweed lies dormant in winter but spring sees its reddish-pink buds starting to sprout from a lime-green bamboo-like stem. When summer arrives it can grow a foot a week with some plants ending up seven feet or higher, strangling other plant life in the garden.
But the real devastation is underground.
The plant spreads through modified underground stems called 'rhizomes' which can spread out 7m horizontally and compromise the structure of foundations and walls.
And that’s why mortgage lenders don’t like it – they are reluctant to lend on properties with potential structural problems.
Is my property worth less with knotweed?
Banks and other lenders will carry out a valuation before agreeing to a mortgage on a property – and this creates an issue if you’re trying to sell a property with knotweed.
Until the property is certified clear of the weed there will be an effect on its saleability and value. In the worst cases properties will be down-valued by tens of thousands of pound or deemed 'unmortgageble'.
In theory, sellers could still sell to cash buyers but savvy ones will get a survey done and discover the problem too.
Getting rid of the weed is a job for professionals and will cost several thousand pounds. Any firm you hire should be a member of the Property Care Association and offer a guarantee the weed will not return – most lenders insist on this guarantee before making a mortgage offer.
Doing nothing is a risky option – it will keep growing while the property owner will be at risk of an Asbo for not dealing with it. Since November 2014 it’s been an offence to fail to control the spread of invasive non-native plants such as Japanese Knotweed.
What do mortgage lenders say?
According to the Council of Mortgage Lenders, different lenders will have individual policies on knotweed.
It says that if knotweed is present, it is usually one of a number of factors the lender will consider, and the level of severity may be a factor.
Attitudes vary but if a lender’s valuer finds evidence of the weed some will simply reject the mortgage application. More lenient lenders will insist on a specialist survey to determine the extent of the problem.
If mortgage lenders agree to lend on an affected property, they will normally require evidence of treatment that will eradicate the plant as a condition of lending.
Buyers and sellers will then have to agree which party will pay for the weed’s removal.
This puts the buyer in a great bargaining position but it’s bad news if you’re the one that’s selling: you could be forced to cover the full cost of the weed’s removal, take a low offer on your property or risk not selling at all.
In some cases the mortgage lender will be willing to proceed with the mortgage subject to a retention of funds, perhaps £15,000, until it is satisfied that the knotweed has been treated and eradicated.
The buyer can either make up the shortfall himself or, more likely, insist the seller bears the shortfall and accepts a reduced sum equal to the amount being held back by the lender.
A seller can guard against this risk by checking early for any invasive plants before marketing their property.
New build disaster
A quick Google search reveals a number of knotweed nightmares.
A case in Hertfordshire hit the headlines a few years ago when the value of a couple’s home dropped by more than £250,000 because of a Japanese knotweed invasion.
The pair had only lived in the new build property for a month when they found the weed growing first into their garden, then up through the floorboards into their dining room.
The house in Broxbourne was initially valued at £305,000 until the knotweed was discovered – then the valuation fell to just £50,000.