Getting A Mortgage With Japanese Knotweed
The discovery of a Japanese knotweed infestation can make selling a house a difficult proposition. This is due to the difficulties presented by Japanese knotweed law, which has led to mortgage lenders taking a cautious approach when dealing with homes affected by the plant. Whilst it is possible to get a mortgage on a property with Japanese knotweed, you may find that you will have to take some extra measures in order to prove to the bank that their money is safe with you.
How do you get a mortgage on a home with Japanese knotweed?
You can get a mortgage on a home with Japanese knotweed with a selection of mortgage lenders, however in order to do so you may need to prove that a Japanese knotweed treatment plan is in place first. Depending on the severity of the infestation, the mortgage lender may ask you to put down a higher deposit or could even charge you more interest in order to balance out the perceived risk of the plant.
How can Japanese knotweed affect you getting a mortgage?
Japanese knotweed can negatively affect your ability to get a mortgage. The plant has been singled out by both the Royal Institution of Chartered Surveyors (RICS) and the government as an invasive plant that, if allowed to grow unchallenged, can take advantage of pre-existing structural damage to outbuildings such as greenhouses, and disrupt paving and tarmac surfaces.
After a landmark decision in 2010 by a mortgage lender to not grant a mortgage to a home affected by the plant, lenders quickly put a variety of policies in place to prevent mortgages from being given to those who are planning on purchasing properties affected by the plant. Thankfully, many mortgage lenders have relaxed their policies regarding Japanese knotweed, but there are still some who will refuse to lend unless it can be proven that the Japanese knotweed has been treated properly.
Paule Raine BSc FRICS MEWI from Expert Surveyors Limited said:
“In nearly all cases where a property has a knotweed infestation, a mortgage will only be available if you put in place a professional Knotweed Management Plan provided by an approved contractor – i.e. a contractor who is a member of the Property Care Association and who can provide a 10-year insurance-backed guarantee on completion of the treatment.”
What do mortgage lenders base their Japanese knotweed policies on?
Mortgage lenders have historically based their Japanese knotweed policies on one key resource that is worth reading up on if you are considering buying a property with Japanese knotweed: the RICS’ Information Notes on Japanese Knotweed and residential property. This paper was written in 2012 as guidance for chartered surveyors to be able to assess the risk factors surrounding Japanese knotweed and how it can affect properties.
In the 2012 Information Paper, the RICS set out out a framework for risk assessment of Japanese knotweed infestations. In the original framework, the severity of the infestation was divided into four different categories and was chiefly concerned with measuring the distance between the Japanese knotweed and the property or boundary. The 7 metre figure had previously been established by an Environment Agency publication and, at the time of publication, ‘no justifiable alternative could be identified’.
Since being published, most major mortgage lenders have cited the information paper as the driving influence behind their policy-making, a decision which has been criticised during a government assessment of the topic in May 2019.
Since then, however, the RICS has published their Guidance Notes on Japanese knotweed and property. In this document, the society lays out the research supporting a new framework for assessing Japanese knotweed and its effect on property.
After a number of scientific papers have been published, it has become evident that whilst large stands of Japanese knotweed has been shown to damage lightweight structures, paths, drains and other ancillary features, it poses less of a threat to structures than trees or many woody plant species such as buddleia. Importantly, Japanese knotweed very rarely causes structural damage to substantial buildings, such as subsidence, heave or impact damage.
Whilst this recent publication (effective March 2022) has gone a long way to compiling and presenting a more rational approach to Japanese knotweed’s impact on residential property, it will still take time for this information to work its way through the various establishments that contribute to the final decision on whether or not a mortgage can be approved.
What are mortgage lenders’ policies on homes with Japanese knotweed?
Mortgage lenders take varying approaches for their policies regarding homes with Japanese knotweed, unfortunately, the majority of them currently err on the side of caution. This position may change when more research is conducted into the effect that Japanese knotweed has on properties.
A UK Finance spokesperson said:
“Generally, lenders decide their own policies for lending on properties affected by knotweed or other invasive plants. 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 consideration. If lenders agree to advance a mortgage they will normally require evidence of a programme of treatment in place by a suitably-qualified professional as a condition of the loan.”
Below you’ll find the stance that major UK mortgage lenders have taken on properties affected by Japanese knotweed as of 2020. However, for the most up-to-date information it’s advised that you contact each bank or building society directly:
Nationwide Building Society
Nationwide Building Society treats properties affected by Japanese knotweed with caution. If the plant is within 7 metres of the property’s boundary then a ‘specialist report’ should be obtained by the buyer, as well as an insurance-backed eradication plan with a 5-year warranty against re-appearance of the plant.
If the plant is more than 7 metres away from the boundary of the property, then Nationwide will still require written confirmation that the buyer is aware of the Japanese knotweed and the consequences inherent if the plant gets closer to the property.
The valuers at Santander are trained to spot Japanese knotweed, if this happens they will ask for a specialist survey to be undertaken by a PCA-accredited specialist. If the plant is within 7 metres of the property then they require the plant to be completely removed by a professional who can offer an insurance backed policy against its return.
HSBC also use the RICS’ 7-metre rule as guidance for their lending policy on Japanese knotweed, however their requirements for those seeking a mortgage is unclear:
“We can only lend if we are provided with a treatment schedule and a completion certificate confirming that the weed has been eradicated that there is a guarantee of at least 10 years in place.”
Metro Bank lends to those buying properties graded in Categories 1 and 2, however they take a stronger position against homes in Categories 3 and 4. For those properties, the bank requires an insurance-backed Japanese knotweed treatment plan to be put in place by a firm approved by either the Property Care Association (PCA) Invasive Weed Group or the Invasive Non-Native Species Association (INNSA). The bank will not release funds until the plan has been fully paid for and guaranteed for 5 years.
Yorkshire Building Society
Yorkshire Building Society appraise each property on a case by case basis, however, they may ask you to fund a specialist report to find out more about the infestation. If they’re not happy with the results then they may choose not to lend. They strongly recommend anyone borrowing on a home with Japanese knotweed to get an insurance-backed treatment plan in place.
Lloyds Bank/Halifax/Ulster Bank
Lloyds and its associated banks require a specialist report outlining the costs of remediation, these findings will impact the valuers decision on the amount of money that can be lent. If it’s determined that the Japanese knotweed poses a structural threat to the property then no money will be lent.
Royal Bank of Scotland (RBS)
RBS is vague with its response to this issue, stating that their valuers take a number of factors into account when assessing how a Japanese knotweed infestation can affect a property, including marketability, mortgageability and insurability. Like other banks, they base their policies on the current RICS guidance.
Leeds Building Society
Leeds Building Society requires an ‘environmental search’ to be obtained if Japanese knotweed is found on the land. They will refuse to lend if they consider the infestation to a threat to ‘the property &/or future saleability’. Their policies are based on recommendations made by environmental specialists and current legal/insurance advice.
The Cambridge Building Society
This society takes a zero-tolerance stance on lending to homes with Japanese knotweed present on the land, they will also refuse to lend when the plant is within close proximity to ‘the security property’.
Coventry Building Society
When applying for a mortgage you don’t need to inform this bank about Japanese knotweed if it falls between Category 1 or 2 of the RICS’ risk assessment. If the property falls within Category 3 or 4 then you will need to inform them about it, which will likely make lending unacceptable.
Furness Building Society
This building society bases their lending decision purely on valuers comments alone, they don’t give any further guidance than this.
Hinckley & Rugby Building Society
Similarly, this building society bases its decisions on its valuers’ comments.
The Loughborough Building Society
Loughborough Building Society make explicit reference to the RICS guidance in reference to their policy-making decisions. In cases where the Japanese knotweed is within the property boundaries (Categories 3 and 4) they require a report, treatment plan by a PCA-accredited firm and a guarantee on all remedial works. They also say that they may decline a mortgage even if the property is in Category 1 or 2. If the plant is seen to be a significant threat to the property by the valuer, no money will be lent.
Newcastle Building Society
This building society require further investigations to take place if the property is assessed as being in Category 3 or 4, this must be undertaken by a PCA-accredited firm. Any remedial works done must be insurance backed for 10 years, be ‘property specific and transferable to subsequent owners and mortgagees in possession’.
Post Office / Bank of Ireland
The Post Office and Bank of Ireland expect their valuers to make their decisions based on the RICS guidance. If the Japanese knotweed is deemed to less than a ‘safe distance’ from the property itself then they will ask for proof of either remedial work having been completed, or that a Japanese knotweed treatment plan is in place.
The bank will also take into consideration the valuers’ opinion on the ‘marketability’ of the property, which suggests that they may choose to decline mortgages if properties are considered to be unsellable because of the infestation.
Bath Building Society
This building society operates with the RICS’ 7-metre rule as their guiding principle. If the Japanese knotweed is within 7-metres of the building itself then they require a specialist report, followed by proof that remedial works are being undertaken by a PCA-accredited firm.
TSB have guidance related to each category of the RICS’ risk assessment. For Category 1 infestations, no action is required on the part of the mortgage applicant unless the valuer recommends otherwise. Category 2 cases should be reviewed on individual merits by the valuer. In both Categories 3 and 4, a full report and treatment plan must be undertaken by a firm accredited by either the PCA or the INNSA. All treatment works must come with a 10 year, property-specific, transferable guarantee.
TSB will not lend in cases where Japanese knotweed is present on neighbouring land and also poses a threat to the property in question.
Will lenders’ policies on Japanese knotweed change?
Most lenders have said that their policies on Japanese knotweed will change when the RICS’ guidance has been updated accordingly. The government has openly criticised how the ‘7-metre rule’ was arbitrarily decided and is now wielded as a ‘blunt-force’ instrument.
There was an official update to these guidelines in 2022 with the publication of the RICS’ Guidance Note on Japanese knotweed and residential property. It is likely that the policies laid down by mortgage lenders will change over time, as the culture around Japanese knotweed changes. Until then, however, the plant will likely continue to be attributed with a negative reputation.
How do you remove Japanese knotweed if you can’t get a mortgage?
If you can’t get a mortgage or remortgage your existing home because of a Japanese knotweed infestation then you may need to remove the infestation first. Bear in mind that it is always best to consult a PCA-accredited removal firm to deal with your Japanese knotweed, as most mortgage lenders will still not deal with you unless you have an insurance-backed guarantee of at least 5 or 10 years.
Japanese knotweed removal can cost thousands of pounds, depending on the severity of the infestation, but this is, unfortunately, a price that must be paid in order to deal with mortgage lenders. Despite the guidance laid out by the RICS, there have been some cases where surveyors have missed Japanese knotweed, which has led to buyers being refused mortgages or being faced with costly removal fees.
If you’ve discovered Japanese knotweed on your land, or have found that you have been missold a property that is infested with the plant, then we may be able to help you claim for the cost of removing it. Get in touch using the contact form on this page or call 0151 668 0554.