Mortgages and Japanese knotweed.
Published 12th October 2018
Many borrowers come to us because Japanese knotweed is causing problems with their mortgage application, and are either trying to find the best lender, or have approached the wrong lender and been declined.
If you have had a mortgage refused due to Japanese knotweed, then this article is for you! In this article we will discuss the affect that Japanese knotweed can have on a mortgage application (in the UK), as although much of the info out there seems to suggest it can’t be done, it is certainly possible to get a mortgage with Japanese knotweed - Each lender views it differently and will usually decide based on where exactly the Japanese knotweed is situated.
In this article:
- Can you get a mortgage on a property with Japanese Knotweed?
- How professionals and lenders assess the risk Japanese Knotweed
- Japanese knotweed mortgage lenders
- How to remove Japanese knotweed
- Low deposit Japanese knotweed mortgages.
- Japanese knotweed and self employed mortgages.
- Japanese knotweed and buy to let mortgages
Definition of Japanese knotweed:
Japanese knotweed is a tall fast growing Japanese plant, it has bamboo like stems and can grow white flowers, the leaves of the Japanese knotweed when mature are green and flattened at the base.
Why do mortgage lenders have a problem with Japanese knotweed?
As it grows so quickly and can spread rapidly, knotweed can overtake a garden and soon cause damage to the property, with issues such as the roots blocking drains and even damaging foundations if left untreated, which is why some mortgage lenders are more restrictive with a Japanese knotweed mortgage.
Can I get a mortgage on a property with Japanese knotweed?
Thankfully, for a lot of properties, the answer is yes.
Every lender will require a professional mortgage survey to assess the knotweed and property in general, and they will judge the extent to which the knotweed causes (or will cause) a risk to the property. Then, each lender will determine suitability based on their own policy for Japanese knotweed mortgages, where some are much more flexible than others.
To find the best options available to you today make an enquiry and we can put you in touch with the specialist who will place you with the best lender for Japanese knotweed mortgages.
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How professionals and lenders assess the risk Japanese knotweed may pose:
The lenders will view the Japanese knotweed on its risk categories, these are generally 4 categories:
- Japanese knotweed is not on the property but can be seen on a neighbouring property, which is more than 7 metres away from the boundary.
- Japanese knotweed is seen on a neighbouring property, but is within 7 metres of the boundary.
- Japanese knotweed is present in the boundaries of the property, but is still more than 7 metres from a habitable space (you may need to have further investigations completed by a qualified or experienced person).
- Japanese knotweed is within 7 metres of the habitable space and/or causing serious damage to outbuildings, drains, paths and boundary walls (With this fourth category, a further investigation would be required by an appropriately qualified and or experienced person).
So when can I get a mortgage with Japanese knotweed?
Many borrowers have issues obtaining a mortgage because the risk category of the Japanese knotweed doesn’t fit the lender they have approached. If/when the property is suitable depends mostly on the risk category:
- Some flat decline if knotweed is identified at any stage.
- Others won’t go above certain categories and limit lending to category 1 or 2, subject to satisfactory specialist survey to confirm no further risks. They may also limit the loan To Value on the property to offset any future risk, and stipulate that satisfactory repair work and treatment plans are in place.
- Others will consider category 3 and 4, subject to satisfactory repair work and treatment plans prior to completion of the mortgage.
Knotweed Risk Category
|Description||Chances of Mortgage Approval|
|Japanese knotweed is not on the property but can be seen on a neighbouring property, which is more than 7 metres away from the boundary.||More likely to be approved at higher Loan to value (LTV) as deemed lower risk.|
|Japanese knotweed is seen on a neighbouring property, but is within 7 metres of the boundary.|
|3||Japanese knotweed is present in the boundaries of the property, but is still more than 7 metres from a habitable space (you may need to have further investigations completed by a qualified or experienced person).||
Possible but likely to require a specialist survey before lending is formally approved.
|4||Japanese knotweed is within 7 metres of the habitable space and/or causing serious damage to outbuildings, drains, paths and boundary walls (With this fourth category, a further investigation would be required by an appropriately qualified and or experienced person).||
Possible but likely for repair work to be carried out before approval. Perhaps condition of mortgage offer is added for work to be completed, or even a retention held by the lender at the point of the mortgage completion, to be release once repair work is signed off.
Japanese knotweed mortgage lenders
As mentioned, various lenders will flat decline an application where the property has knotweed on or near the boundary. High street lenders (like Woolwich and Natwest for example) may have a completely different policy to those who are more specialist and approve knotweed mortgages regularly. That said, depending on the severity and category of the issue, there are certain high street lenders that may still consider the mortgage at table topping rates.
How to remove Japanese knotweed if you can’t get a mortgage
If Japanese knotweed is stopping your mortgage application from going through, one possible solution is to remove the knotweed using specialists who carefully ensure its total removal and destruction (more expensive), or (cheaper) run an ongoing treatment plan over 5 or so years. The costs to remove it can vary depending on how much there is in the area you’re looking to remove it from. There may also be requirements from the lender that the provider of the service offers a knotweed guarantee for the mortgage to be approved.
Getting a mortgage on a property with Japanese knotweed with a low deposit
Typically the amount of deposit you’ll need will depend on the category of knotweed risk, as well as the general application information (i.e. affordability / credit history etc.). The more severe the risk, the higher the deposit required. It is possible to obtain a mortgage with a 5% deposit and Japanese knotweed, even on the mortgage guarantee help to buy scheme – this depends of course on whether the government help to buy scheme continues or not, as currently (at the time of writing) only the help to buy 1 (for new build property) is available.
Getting a mortgage with adverse credit history can be tricky regardless, but add in additional issues with the property and the number of willing lenders can reduce dramatically. Thankfully, there are some specialist adverse credit lenders that also consider lending on properties with Japanese knotweed, depending on the knotweed category and the adverse credit details (how recent and how severe), as well as the loan to value (bigger deposit / equity the better). So, whether you’ve had something small like late payments, something more severe like defaults, CCJs or Debt management, or perhaps even a bankruptcy in the past – there may still be lenders to consider your application. For more information on acceptable adverse credit issues, read our article here.
Japanese knotweed mortgages whilst self-employed
If you are recently self-employed or have been trading for years, many lenders will have a different policy on the level of your acceptable income. For instance, some will want 3 years’ accounts, where others are happy with 1 year. Some will lend on average earnings for the last 3 years, others will approve based on your most recent figures. Finding a lender who accepts Japanese knotweed and self-employed income that matches your situation can be tricky, so speaking to an expert in both areas is even more important. For more info on self-employed mortgages, read our articles here
Is it possible to get a Japanese knotweed mortgage on a buy to let property?
Typically the surveyors report will echo the residential lending policy if applying for a buy to let mortgage on a property with Japanese Knotweed. Normal rules for BTL lending will apply in terms of increased (usually) deposit and a different measure of affordability based on the rental income of the property. For more info on BTL policy read here
This can vary lender to lender again, but yes there are lenders that would consider commercial mortgages on property with Japanese knotweed. This will be dependent on the risk category mentioned above, as it case by case the specialists we work with would be able to establish what options may be available for you. Commercial mortgage lenders can be a little more restrictive and the use for the property can have an additional impact.
If you’re looking to get a mortgage with a property that you know has knotweed, or you think may have knotweed, then make an enquiry today and one of the Japanese knotweed mortgage specialists will be in touch ASAP to discuss things with you.