Property market prepares for growth of Knotweed - 8848

Property market prepares for growth of Knotweed

Spring, with its promise of lighter mornings and warmer breezes, always sees a seasonal surge in homes being put up for sale.

But be warned: rising temperatures also bring with them the scourge of the British homeowner – the dreaded Japanese Knotweed.

Fallopia Japonica, to give it its Latin name, is described as a ‘real thug’ by the Royal Horticultural Society. It grows rapidly, overwhelming everything in its path. Horror stories report it sprouting through concrete – both indoors and out – and taking up to seven years to eradicate. And anyone failing to control its spread could be hit with an ASBO or fined thousands of pounds.

So whether you are buying or selling a property, the financial and legal implications of this tenacious weed are serious.

Mitesh Lala, a residential property expert with Black Country law firm Higgs & Sons, says: “It is important that homeowners identify and appreciate the risks in selling their property if there are any signs of Japanese Knotweed – this will save them time, stress, and ultimately, a lot of money.”

He added: “Typically, the average mortgage provider will be reluctant to lend where there is any evidence of Japanese Knotweed.  With reports that Knotweed costs the UK economy £166m per year in home devaluations and treatment, is it any wonder mortgage lenders won’t take a chance?

“Whilst there is no blanket policy in place for lenders to refuse to lend, a seller runs the risk of the buyer being unable to proceed because their lender simply decides to decline their mortgage offer – due the presence of Knotweed.  The best the seller might hope for is an open-minded lender willing to assess the issue on a case by case basis, who will proceed when the prospects of successful treatment have been ascertained from the outset.”

Mitesh suggests that a typical scenario might be:

The lender is willing to proceed with the mortgage subject to a retention of funds from the borrower, perhaps £15,000, until it is satisfied that the knotweed has been treated and eradicated.

The buyer will either a. make up the shortfall himself to allow the purchase to go through, or b. play hardball and insist that the seller bears the shortfall and accepts a reduced sum equal to the amount being held back by the lender (but that the seller would receive that balance once the lender releases the retained amount to the buyer).

The sale can therefore proceed, but there is a delay in the buyer and/or seller receiving the retained balance from the lender.

Mitesh added: “In theory, the lender should accept a completion report from the treatment specialists confirming the operation as being successful and that no re-growth of the Knotweed will occur.  The seller will however, continue to run the risk of being at a financial shortfall until the lender is satisfied with the final report.