Mortgages for properties with Japanese knotweed
Japanese knotweed has terrorised homeowners for generations. But how will Japanese knotweed affect your ability to sell or buy a house?
This article will explain what Japanese knotweed looks like, how it can affect your chances of getting a mortgage, and how you can overcome the problems caused by this weed.
Click the link below to speak with mortgage brokers about a property with Japanese knotweed, start your journey below:
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Is it possible to get a mortgage for a property with Japanese knotweed?
You might have heard you can still get a mortgage if there is Japanese knotweed near or within the property boundaries. The Royal Institute of Chartered Surveyors has updated its guidance regarding this invasive plant.
Chartered surveyors believe there is too much caution in the mortgage industry, especially around Japanese knotweed.
However, a mortgage lender can be cautious about financing properties with Japanese knotweed, so getting professional advice if you consider buying a weed home is essential.
All mortgage lenders decide differently on this; contact us today, and we will help you get your mortgage enquiry.
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What is Japanese knotweed?
Fallopia Japonica, also known as Japanese knotweed, is a weed from Japan. It was once found inside volcanoes and has since been hardy. It can overgrow in spring and summer, sometimes increasing in size multiple times per day.
It has strong roots that reach up to 20m below the surface. They can also destroy any obstacles they come across.
Concerns about mortgage lenders
Mortgage lenders should be cautious about lending due to the destructive nature of Japanese knotweed. Even if there has been no damage or it is on the neighbouring property, its presence can cause property values to drop. It can be costly and make renovating more challenging for potential buyers.
Japanese knotweed-covered properties in the area may put off lenders. This can cause problems for homeowners who live near train tracks. The plant was initially designed to stop railway embankment landslides.
Numerous scientific studies have shown that residential structures are more stable than other invasive species. RICS published New Japanese Knotweed Guidance in March 2022.
Lenders are now more comfortable lending to properties with Japanese knotweed around them. However, this type is still considered individually, depending on the severity or potential for future destruction.
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You’ll also need to meet additional criteria.
Mortgage lenders used the RICS risk matrix until recently to assess the lending risk. This relied heavily upon the “7-meter rule”, which prohibited Japanese knotweed from being found within 7 meters of the property boundary.
This rule was scrapped after RICS’s new guidance stated that it is unlikely that damage will be done to “robust buildings with substantial basements.” Surveyors now have to exercise judgment when assessing the risk of Japanese knotweed within property boundaries.
Surveyors must report Japanese knotweed present to mortgage lenders if it is found within 3 meters of property boundaries. However, they are not required to register any further than that unless the Japanese knotweed infestation is widespread or there is no control.
While this new way of thinking will take time to get to all lenders, the criteria are expected to improve shortly. Some lenders still base their lending on the old risk matrix that defined Japanese knotweed’s presence into four categories.
If Japanese knotweed is found on the property, you might still need to meet the following criteria:
- Make a bigger deposit
- Register for a PCA or INNSA treatment plan that is guaranteed. This may require you to prepay for a certain number of years.
- A member of the Property Care Association or INNSA (Invasive Native Specialists Association) can order the removal of knotweed.
You will need to meet the general criteria for mortgage lending, including affordability, creditworthiness and age limits. These requirements can vary from one lender to another.
Our leading market financial advisers and online mortgage advisors can work with you when you click the link below.
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How to handle a Japanese knotweed-related lender decline
Although criteria are generally less stringent, lenders still set standards based on their risk assessment. Surprisingly, some lenders refuse even to consider Japanese knotweed homes. Finding a lender with an excellent appetite to purchase this property is still essential.
Our brokers are experts in this field. They will know which lenders are more comfortable lending under these conditions and which lenders may require that you have control measures such as the removal of knotweed in place before approving your application.
If necessary, they can recommend PCA surveyors or invasive weed management firms to help you meet all lending criteria.
What lenders are likely to consider your application
Most lenders will consider lending to properties with Japanese knotweed around their property boundaries. However, many balance the lending risk by offering a higher interest rate, mainly if the Japanese knotweed threatens the property or its value.
Many larger lenders like Virgin and HSBC still base mortgage approvals on the four knotweed severity categories from the RICS risk matrix. However, others such as Barclays, TSB and many building societies have updated their policies to reflect the updated guidance.
These lenders use broader criteria to follow current RICS guidance and base their decisions on the surveyor’s advice rather than knotweed at a particular distance from the property.
It is not advisable to approach a lender directly if the property you buy has Japanese Knotweed. A broker who specialises in complex properties is a better option since they have strong working relationships with the best mortgage lenders to approach.
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Is it possible to get rid of Japanese knotweed?
It is possible but not easy to eliminate. You should not attempt to remove it yourself as this could only make the problem worse. The government has guided if you want to purchase a property in an area where Japanese knotweed could be a problem.
According to the RICS guidance, most lenders will accept control of the spread of the problem species rather than complete eradication. While this should reduce the cost of meeting lending criteria for most applicants, some lenders may still require a knotweed removal guarantee.
Complete removal is required if you plan to construct an extension or lay patios. This can be expensive as you will need to hire a Japanese knotweed management contractor who is INNSA or PCA certified.
Match you with a Japanese Knotweed mortgage broker
Although Japanese knotweed is not a problem for getting a mortgage, there are still lenders that will not consider this application.
Talking to our specialist online mortgage advisor will find you a lender who will work with Japanese knotweed. This is the easiest option. We will do all the research for you.
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