Japanese Knotweed, an invader from the East, is more than just a fast-growing plant. For homeowners and prospective property buyers, it’s a significant concern that carries implications for their mortgages. This post seeks to shed light on this critical issue: How does Japanese Knotweed affect your mortgage?
What is Japanese Knotweed?
Japanese Knotweed (Fallopia Japonica) – not to be confused with Bamboo, to which it bears a resemblance – is a herbaceous, perennial plant that was brought to the UK from Japan in the 19th century as an exotic and decorative species. Ironically, this botanic alien has today lost its charm, becoming a dreaded name in the home-buying scenario. It grows aggressively, has a robust rhizome system and can cause severe structural damage to buildings, including your cherished home.
How does Japanese Knotweed Affect your Mortgage?
The primary concern surrounding Japanese Knotweed is its potential to cause physical damage to properties. This ‘horticultural thug’ can grow at an alarming rate of up to 10cm per day during the summer, infiltrating foundations, drains and walls. It can destabilise structures cumulatively leading to massive repair costs.
So, how does this affect your mortgage chances?
1. Risk to Lenders: Since mortgage lenders’ investment security rests on the property itself, they shy away from properties severely infested by the Knotweed. The decrease in property value due to the presence of Knotweed and the potential repair costs make the property less marketable and less asset-worthy against the loan.
2. Property Devaluation: A significant Knotweed infestation can lead to a property being drastically devalued. This can impact the Loan to Value (LTV) ratio – essentially how much of your property’s value you want to borrow.
3. Insurance Complications: Insurance companies often exclude Japanese Knotweed damage from their policies due to the potential high cost of repairs. The absence of this insurance coverage can pose a significant risk to the lender in case of a severe outbreak.
4. Legal Woes: If Japanese Knotweed from your property spreads to neighbouring properties, you may also face legal action, another aspect mortgagers must consider.
How is Japanese Knotweed Discovered during the Mortgage Application Process?
Surveyors play a pivotal role in identifying Japanese Knotweed during the property valuation process. Trained to spot the signs, their report can indicate the presence of this invasive species, even if it’s not visible to the naked eye. It is then typically classified using the RICS (The Royal Institution of Chartered Surveyors) categories 1-4, with 1 being least concerning and 4 implying significant infestation.
What to do if Japanese Knotweed is Found?
If Japanese Knotweed is found on your property, all is not lost. There are several professional eradication firms that will draw up a management plan to control and remove the knotweed. This plan, paired with an insurance-backed guarantee, can reassure lenders and might allow for successful mortgage application.
In summary, while Japanese Knotweed does pose a potential hurdle in your mortgage application process, it need not be an absolute deal-breaker. Awareness, early detection, and professional assistance are your best weapons to combat this thorny problem. While it will require effort and potentially significant expense to deal with, it is manageable, allowing you to keep your property’s value high and your mortgage options open.
