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Knotweed: The biggest unmanaged risk in the UK property market

by: Will Sillar, managing director, National Knotweed Survey Limited
  • 12/08/2015
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Knotweed: The biggest unmanaged risk in the UK property market
Two-thirds of broker deals have been affected by Japanese knotweed, the invasive plant whose virulent growth can damage buildings and at worst render them worthless. So what can be done about this threat?

In a Mortgage Solutions poll conducted in 2013, as many as two-thirds of mortgage advisers said they have worked on cases affected by Japanese knotweed, with many forced to withdraw mortgage applications because of the weed.

Horror stories about this aggressive weed abound: it can crop up anywhere and its presence will affect every party in a property transaction – vendors and buyers, agents, surveyors, insurers, lawyers, and of course lenders and brokers.  While some dismiss the knotweed threat as illusory, the impact it has is real, documented, and growing.

Starting from less than 0.7g of rhizome (subterranean stem) – no bigger than a fingernail – knotweed can spread and grow up to 40mm per day, resisting weedkillers and growing through bricks and mortar, tarmac, drains and ducts. There is estimated to be at least one infestation of the plant in every 10 km2 in the UK, and in some areas it is now endemic.

But the real problem with knotweed is uncertainty about its location and extent. Nor is there a real figure for how many millions of mortgage business has fallen through because of the presence of knotweed.  Most people are in the dark about what to do when it is discovered, and doubts are in any case growing about whether it can ever be truly eradicated.

Despite strenuous efforts by RICS and others, there is still an element of luck in finding a surveyor who can accurately identify knotweed. And while remediators may employ “standard” chemicals, it is extremely tough to tackle knotweed conclusively. With no national standard in place for eradication, there remains some uncertainty about which firms are best qualified to deal with it effectively.

As recently as five years ago, most lenders would simply refuse to lend if there was any indication of knotweed on or near a property. The situation has since improved, thanks to initiatives by RICS and the Property Care Association among others and by the recently formed Invasive Non-Native Species Association. Equally many lenders have a more considered policy on knotweed, taking a case-by-case approach to each application.

Nonetheless the extent and scale of the risk to all parties in any property transaction remains unquantified.  For individual transactions, and with RICS estimating the potential cost of remediation at up to £16,000, lenders and brokers face the possibility of deals failing to complete, with attendant administrative and opportunity costs to both. What, then, do brokers and lenders need from the knotweed industry?

The first step has to be a single, accurate and comprehensive source of information on the whereabouts, extent and history of knotweed throughout the country. Work is underway on such a resource, along with the means to provide access to property owners and managers, financial institutions and property professionals.

By bringing together academic research, historic records, treatment records, local authority and transaction data, and some of the world’s most accurate aerial imaging technology, we are building a nationwide knotweed “heat map”, capable of providing information on specific properties and locations on request. Our aim is to provide this information in due course to every party with an interest in the natural and built environments. As sample data becomes available we will announce it to the mortgage industry as a priority.

There is a collective willingness in the property industry to take concrete steps to get on top of the knotweed problem. Given the ability to quantify it correctly it becomes easier to shape and adopt effective management and remediation strategies. Moreover, it becomes possible to understand and assess the true risk posed by knotweed to every party in the property transaction value chain.  Until this can be done, lenders and brokers – to say nothing of insurers, surveyors and estate agents – will themselves bear a risk that they are not equipped to manage, and will continue to cost them time and money.

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