Property with Japanese Knotweed

Japanese knotweed (Fallopia japonica) is a non-native weed that spreads rapidly, which can cause damage to property and lead to serious financial responsibilities. Knotweed evolved to have deep roots to help it survive in its native Japan, where volcanic, rocky soil, ash deposits and an erratic climate create a difficult environment. However, when it was imported into the UK in the 19th century, it was not similarly constrained with its deep roots causing potential issues with foundations, groundworks and drains.

In winter the plant dies back to ground level and can be hard to detect but by early summer, the bamboo-like stems emerge from rhizomes deep underground to shoot to over 2.1m (7ft), suppressing all other plant growth and, even more significantly, damaging brickwork and potentially even concrete. Japanese knotweed rhizomes search for moisture and can interfere with drains and other structures, blocking and sometimes lifting the pipework and clogging sumps. Other underground infrastructure, such as cabling and water pipes, will also be at risk.

If it is found on your property it may need to be eradicated by professional services. Eradication requires determination and resources as it is very hard to remove by hand or eradicate with chemicals, and requires specialist contractors. Where Japanese knotweed is considered to pose a risk to the property, it is usually necessary to undertake to eradicate the plant by implementing a Japanese knotweed management plan immediately by a member of a recognised trade association, such as the Property Care Association. Physical removal requires the extraction of soil 3m down and 7m across from the edge of visible growth and all of this must be sent to an appropriately licenced waste management facility.

The problems may also include additional liability if you allow Japanese knotweed on your property to spread into the wild. This would contravene the Wildlife & Countryside Act 1981. The problem is that the plant is almost impossible to contain, as its underground rhizomes can extend to a maximum of 7mrtres while being impossible to detect on the surface.

Having Japanese knotweed on a property will mean costs for eradication, liabilities from other landowners if it spreads to their land and the risk of prosecution under the Environmental Protection Act 1990.

Surveyors will take the risk of damage from Japanese knotweed into account in their assessment of a property. This is based on criteria advised by the Royal Institution of Chartered Surveyors. Simply having it present could mean a reduction in price of 10%. Subsidence as a result of a serious Japanese knotweed infestation could devalue a house by 20% [8], and up to 80% in the worst-case scenarios. Subsidence is treated with heavy caution by mortgage lenders, who will often not lend at all if a property has been affected by it.

Properties badly affected by subsidence are often only fit for cash buyers who are willing to take on the risk themselves but will therefore do so at a lower price.

If a property is found to have an infestation of Japanese knotweed on the land or within 7 metres of it, it is extremely difficult to secure a mortgage against the property. In some cases, lenders have simply rejected applications for a mortgage outright. What’s more, Japanese knotweed doesn't have to be located within the boundary of your property for a surveyor to categorise your property from being at risk from it. Many property owners have knotweed encroachment from railway lines close to their property. 

If you want to buy resident or commercial property that has, or is suspected to have, a Japanese knotweed infestation, you may simply not be able to secure funding from conventional sources.

How can you get finance for Japanese knotweed infestations?

Mortgage lenders take varying approaches in their policies regarding homes with Japanese knotweed, but most are cautious.

However, at Rangewell, we do know lenders who may be able to help.

Turning a problem into an opportunity

Although it means challenges with funding, knotweed may not be a complete disaster.

Certainly, its presence will devalue a property - but if it is found to be present, it may provide the opportunity to acquire a property at a bargain price.

Many of the mainstream lenders will simply refuse to help, considering the area too full of unknown risks, but some specialised lenders are fully aware of the costs and the challenges involved. 

Generally, lenders will 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 put in place by a suitably qualified professional as a condition of the loan, with a treatment schedule and a completion certificate confirming that the weed has been eradicated and that there is a guarantee of at least 10 years in place.

At Rangewell, we can help find lenders able to offer a variety of mortgage products that will help.

Commercial mortgages

A Commercial Mortgage is a loan secured on property and works much like a residential mortgage. If you want to buy premises or land for your business to use, or a property to let out or develop as an investment, it can provide the level of funding you need. It can help you buy the premises for your business to work in or let you buy additional premises or land for expansion or to let out.

Knotweed may thrive around commercial buildings, especially in forgotten corners where ownership may be in question. A thorough survey that identifies a liability could be used as a negotiating tool to reduce the price. 

Buy to let mortgages

Buy to let mortgages can be used for both residential and commercial property. In those cases where knotweed is found to be present, it may present another level of difficulty in securing suitable funding - which Rangewell can help find solutions for.

Development mortgages

Because it may thrive in neglected gardens and other spaces which are not regularly maintained, Japanese knotweed is a particular challenge for developers who are buying older, run down properties. Budgeting for its removal and remedial treatment must be part of your calculations as a developer. 

Special care may be needed if the infestation has been going on for some time. If you are redeveloping an old building, you may budget against unexpected rot problems which can mean extra work and new joists and floors. However, they could be more costly if structural instability is discovered and bracing and underpinning is required - and much more costly again if demolition and rebuild is the only answer.

However, if the property is only lightly affected - and remedial work could be guaranteed - there are possibilities of securing development finance from a few very experienced lenders.

What about the costs?

The costs of any mortgage product will depend on the risk involved for lenders, and those lenders who are prepared to lend to buyers of infested property will be fully aware of the increased risks.

This will be reflected in the cost of the mortgage product offered.

Costs will vary across lenders and according to the severity of the infestation and the risks involved.

Getting the help of the Rangewell team - and the ability to work across the entire lending market to secure the most attractive price for the funding you need is essential.

Finding funding for a development affected by knotweed

A developer working in a London commuter town became aware of a large townhouse that might be suitable for conversion into an HMO.

His plans were acceptable to the local authority, but when the survey was carried out by a potential lender, the presence of knotweed on the neglected railway siding that was on one side of the property caused the lender to refuse an offer.

The developer called the Rangewell team, where we found a lender able to take a more sympathetic view, based on previous experience. 

The developer was able to renegotiate the purchase price and take advantage of the lender's help with securing a guarantee against encroachment from the railway land, and the potential for securing payment from network rail.

Financial solutions from Rangewell for property affected by knotweed

At Rangewell, we can use our Property Finance expertise to support your property plans – and ensure that you have the financial solutions you need, even when there are challenges like Japanese knotweed. We can help source business lenders who can provide specialised funding whatever difficulties you face - and turn every challenge into an opportunity.

We can also help you secure the funding you need at the most competitive price. Lenders will vary greatly in what they offer, and even a fraction of a percentage point can make a substantial difference to what you actually pay each month. It means that getting expert support to find the right deal is essential to save money.

At Rangewell, we help property professionals of all kinds find the finance they need. We cover the entire UK lending market, which means we can help you find the most cost-effective property finance for all property investment needs - and to help you make the most of your particular plans.

Our knowledge can not only help you secure the funding you need for your student letting business, it can save you a great deal of cash.