Knotweed clogs application process
Mortgage advisers have reported an increase in cases held up by Japanese Knotweed since the Royal Institute of Chartered Surveyors issued guidelines on it last year.
Their concerns come as a property care specialist urged lenders to shed their nerves about lending on properties with the weed (pictured).
Lentune Mortgage Consultancy managing director Stuart Gregory contacted twelve lenders in June to find out their views on the issue.
He said: “There were only two or three that would really consider lending on properties with Japanese Knotweed and those that would had strict criteria.” Since then, growing awareness of the problem seemed to encourage lenders to be more flexible, he added, but other professionals in the housing market chain remained concerned.
“Last week I had a client who found when they were selling their property that they had Japanese Knotweed in the garden.
“Instead of the lender saying no, it was the solicitor who told the buyers to pull out.”
He called on the Council of Mortgage Lenders to provide guidance for all lenders to follow:
“There are too many different interpretations. Some lenders were literally saying ‘no’ – it wasn’t up for discussion.”
Coreco director Rob Gill submitted a client’s mortgage application to Halifax but later learned the property in question had Japanese Knotweed.
He said: “Everyone just panicked. You end up doing a lot of hand holding as you try to get the case through. “We have now got to the stage where Halifax probably will consider lending on it but they want to see that work to treat it has commenced.”
A neighbouring property and a nearby park also had the weed, meaning there was also a need to get assurances from neighbours and the local council that treatment would begin.
Gill joined calls for a clearer policy from lenders:
“Halifax is pretty good but there is generally a lack of clarity.”
His co-director Andrew Montlake said the issue was on every broker’s watch list:
“The problem is it is often not identified until the valuer comes around.
“If it comes up at a valuation then it is quite difficult to do anything. It is a question of finding out if the owner is aware of it and has started treatment.”
Property Care Association chief executive Steve Hodgson, whose trade body has set up a task force to deal with the issue, said the weed was not “house cancer” and could be dealt with in the same way qualified contractors dealt with faulty wiring or damp.
Hodgson told Your Mortgage the reaction of lenders had been predictable when they did not understand the risk or the solution:
“Now the risk and the solution have become apparent perhaps they should reassess their protocols on whether they should lend on properties with Japanese Knotweed.
“It doesn’t mean the property is worth less it just means something needs to be done to make sure the value is maintained.”
He named Santander and Lloyds as lenders with a more open-minded approach to properties with Japanese Knotweed and called for smaller lenders to follow their example.
However, a Building Societies Association spokeswoman said their valuation panel found smaller building societies were better able to assess the risk and thus more likely to lend than banks with automated systems.