Getting a mortgage
A house or flat with evidence of Japanese knotweed can potentially be a real issue. Before we talk a little about this it is important to understand that a prospective lender will need to know how close or far the Japanese knotweed is from the dwelling.
The Royal Institute of Chartered Surveyors (RICS) puts the risk into 4 categories depending on its proximity to the boundary or dwelling. It is these categories that could define whether a lender will consider lending and indeed whether the lender would require a treatment program to be in place.
RICS categories
The Royal Institute of Chartered Surveyors (RICS) provides some standard information on the subject of Japanese Knotweed and puts the risk into 4 categories depending on its proximity to the boundary or dwelling.
RICS revised the categories in March 2022 from the previous 4 to 1 scale from the greatest risk to the least risk to a new A to D scale again with A being the greatest risk to D being the least risk.
As of early 2023 many of the mortgage lenders have yet to update their lending policy to reflect the new category changes so for the time being I have included both the old and new categories. Some of the descriptions below have been simplified to give a brief insight rather than a detailed description especially when mortgage lenders have such a variety of policy.
Japanese Knotweed is within 7 metres of a habitable space, conservatory and/or garage, either within the boundaries of this property or in a neighbouring property or space; and/or Japanese Knotweed is causing serious damage to outbuildings, associated structures, drains, paths, boundary walls and fences and so on. Further investigations by an appropriately qualified and/or experienced person are required.
Although Japanese Knotweed is present within the boundaries of the property, it is more than 7 metres from a habitable space, conservatory, and/or garage. If there is damage to outbuildings, associated structures, paths and boundary walls and fences, it is minor. Further investigations by an appropriately qualified and/or experienced person are required.
Japanese Knotweed was not seen within the boundaries of this property, but it was seen on a neighbouring property or land. Here, it was within 7 metres of the boundary, but more than 7 metres away from habitable spaces, conservatory and/or garage of the subject property.
Japanese Knotweed was not seen on this property, but it can be seen on a neighbouring property or land where it was more than 7 metres away from the boundary.
When visible damage has been caused lenders will require an inspection by a suitably qualified specialist who is a member of a recognised trade body and the completion of any recommended works under a Japanese Knotweed Management Plan, with the benefit of an insurance-backed guarantee. The value of a property is likely to be affected when an infestation is assessed at this category. Valuers should take account of all relevant factors, including current market conditions, when considering the impact of an infestation on value at this category.
Most lenders will not consider lending where visible damage has been caused.
When Japanese knotweed is likely to prevent use of or restrict access to amenity space, it is anticipated that most lenders will require an inspection by a remediation specialist who is a member of a recognised trade body and the completion of any recommended works under a Japanese Knotweed Management Plan, with the benefit of an insurance-backed guarantee. The value of a property may be affected when an infestation is assessed at this category. Valuers should take account of all relevant factors, including current market conditions, when considering the impact of an infestation on value at this category.
An assessment at this level indicates that an infestation is not causing damage to significant structures within a site and not likely to prevent use of or restrict access to amenity space. It can therefore be considered as having a low impact on the property.
The lender may recommend an inspection by a remediation specialist who is a member of a recognised trade body so the property owner can be advised about future management and control. This is particularly relevant if the growth is within 3m of a boundary. There may be some impact on the value of a property when an infestation is at this level, but this will usually be modest and more likely to be a reflection of the cost of any remediation rather than any direct effect on the use of the property itself. Valuers should take account of all relevant factors, including current market conditions, when considering the impact of an infestation on value at this category.
An assessment at this level indicates that an infestation has not been seen within the subject site.
The situation should be reported to the lender or client, but remedial action on land beyond the subject property is not within the control of the property owner. Proximity to the boundary means there is a possibility that there may be future spread from the off-site infestation onto the subject site. The likelihood of any possible spread will largely depend on the extent of the adjoining infestation. If an infestation is on neighbouring land there may be relatively little prospect of spread but if the adjoining infestation is extensive, the probability of spread may be greater.
In some circumstances, it may be appropriate for advice to be sought from a remediation specialist about the merit of taking defensive measures against possible future encroachment. In most cases, there is likely to be limited impact on value unless a severe adjoining infestation makes expensive defensive measures desirable. In certain situations, there may possibly be implications for remediation and, rarely, perhaps even potential legal action. This could increase the impact on value, but only in exceptional circumstances would an infestation at this category be expected to be made the subject of a mortgage advance condition.
Irrespective of the extent of an adjoining infestation, and if discussion or negotiation are not successful, there is no practical way for a property owner to impose remedial measures on an adjoining owner without taking legal action of some sort. Consequently, it is not appropriate for lenders to require remediation of an infestation on adjoining land as a condition of a mortgage advance because it is effectively beyond the control of the mortgagee/property owner to impose this. Even when an adjoining owner is willing to undertake remediation, it may not be possible to ensure that work is carried out by an approved contractor or with the benefit of an insurance- backed guarantee (typical lender requirements). Additionally, remediation undertaken by statutory bodies or local authorities may be carried out by their own contractors, which are unlikely to meet this requirement in any event.
Mortgage lender criteria in relation to Japanese knotweed based on the old Categories 4-1
The lender views with regards to the existence of Japanese knotweed is extremely varied. Some for example will not lend on a property even if it is Category 1 i.e. more than 7 metres away from the boundary. On the other extreme some lenders will consider Category 4 i.e. within 7 metres of habitable space as long as a treatment program is in place.
Some lenders will go with whatever the valuer says and again probably suggest a report and treatment plan if the valuer sees evidence of Japanese knotweed within the boundary.
Lenders may also take a view on the application as a whole. If they feel that other aspects of the mortgage application are not strong for example low deposit, difficult credit history and a financially tight income/employment situation the lender may decline to lend on the basis the Japanese knotweed adds an additional risk which they may not wish to accept.
Other Considerations
Getting a mortgage in 2023 is not straight forward. Key factors such as your level of earnings, whether you’ve started a new job, how long you’ve been self-employed, credit history, current level of loans & credit cards, and age are some of the factors used to determine whether a mortgage lender will consider lending what you need.
If you add into this mix that there is Japanese knotweed within or near the boundary it is a minefield to work out whether you can even get a mortgage and with whom.
That is where Japanese Knotweed Mortgages comes in. We will take all of this into account when trying to find you a mortgage. Just go to the contact page for ways to get in touch and we will respond to your enquiry.