“I’m sorry Sir, but we are going to have to decline this application. Why? Japanese Knotweed has been found on the property, and no there’s nothing you can do.”
Up until recently no one at Century Financial Planning had even heard of Japanese Knotweed, and we certainly had not expected to find ourselves embroiled in several separate Knotweed problems in quick succession. But in a true Chartered Financial Planner’s way we adapt, learn and advise.
So what is Japanese Knotweed?
Brought over by our delightful Victorian ancestors Knotweed was used as a fast growing plant to departmentalize gardens and provide privacy, not to forget its’ nutritional value. Now it ruins mortgage applications and strikes fear in the eye of any vendor.
Why is it such a problem?
Knotweed grows very, very quickly and has been known to grow into cavities in houses damaging the property. Despite never actually “pulling a house apart” mortgage lenders have adopted a very harsh, and to be honest, over the top stance on the plant.
Sadly when one bank decides not to lend it can cause a domino effect, other lenders are spooked thus leaving a handful left. So despite a property having a fairly innocuous plant on its premises and the likelihood of any significant damage being done slim, only having a handful of potential lenders that would even consider a mortgage application makes the house poor security for a loan.
What should you do if you find it?
Depends if you are buying, or selling.
If you are in the process of purchasing a property and the surveyor finds Knotweed within 7 meters of the property and the problem is not being treated, your mortgage application is going to be declined. If the Knotweed is 7 meters away from the building or is being treated, your application may still be declined. However, there are a couple of lenders who will base their decision on the discretion of the surveyor’s comments.
If you are selling your property and have found Knotweed don’t give up just yet because there are a few things you can do.
Firstly it might be an idea to take your property off the market while you deal with the problem at hand; the added stress of having potential new buyers declined at the 11th hour isn’t one you need.
The next step is contact a Japanese Knotweed Removal specialist. Things you need to look for are guarantees, and be certain they are a member of the Property Care Association.
The eradication of the plant is not an overnight process, but one that takes a couple of years. However, this doesn’t mean you can’t necessarily sell the property for that period, as I touched upon earlier a few lenders will leave it to the discretion of a surveyor’s comments. Things like, is a management plan in place? Does the removal company offer a guarantee? The extent, proximity and whether any damage has been done are all questions that the surveyor is going to want to know. And as a vendor you need to make sure you have as much information as possible to hand so the surveyor can make an informed decision.
This is a very grey area of lending at the moment, as most banks and building societies don’t want to stick their necks out and give specific guidance, and hence a difficult area to advise on.
Each case will have its own characteristics:
• Where the knotweed is
• The severity
• What the clients situation is regarding how quickly they wish to sell their home
Although it is not impossible to get a mortgage, it can prove very difficult. But should you make the necessary arrangements with a Japanese Knotweed Removal company, provide a surveyor with as many details as you can, you can only increase your chances of a positive outcome.