“House value halved due to presence of Japanese knotweed”.
There are many stories in the press, with similar headlines, that state Japanese knotweed is causing house values to be slashed by as much as a half. Most recently, a property in Woolston Park in Cheshire claimed a potential £30,000 loss due to the presence of knotweed.
When Japanese knotweed is identified on a property, a mortgage provider will often refuse to lend if a management plan is not in place. This is because the knotweed is an unacceptable risk to lenders. Knotweed, if left untreated, can cause significant damage to property.
Because of the banks’ reluctance to lend, a lot of sellers assume they will only be able to sell their property to a cash buyer, who will demand a reduction in price for the inconvenience. If the cash buyer is clued up on all things knotweed, they know they can get a bargain and then sort the problem out once they own the house – all for less than the original asking price. The cash buyer can put in an offer significantly lower than the asking price, because they can utilise the fear factor in trying to force a cheap sale.
Awareness of knotweed is higher now than it used to be, but there are a lot of misconceptions printed in the press, which can make the whole knotweed situation seem like a nightmare. These horror stories online can make it seem like it is almost impossible to treat, as well as being extortionately expensive. Sellers need to ensure they understand what Japanese knotweed is and how it can be treated. Once a management plan backed by an insurance backed guarantee has commenced by a reputable company, mortgage providers will lend because the risk has been mitigated.
House values could drop commensurate with the cost of treatment, but assuming an insurance backed guarantee underwritten by a rated insurer is in existence any further reduction should be minimal.
It is always beneficial for the buyer and seller to work together once the issue of knotweed has been identified. The buyer will have comfort in knowing that the work is being carried out by a reputable specialist acceptable to their lender, and the seller will feel safe in the knowledge they’ve got a sale!
Just last year we highlighted the case in Wales, where the value of the property was deemed to be halved due to knotweed. After we treated the problem and issued our insurance backed guarantee, the sale went ahead, just shy of the asking price. Our guarantees, which are underwritten by a syndicate at A-rated Lloyd’s are accepted by all the major banks and building societies.
If you would like to talk to an expert about the different Japanese knotweed removal techniques we have to offer, which are supported by our insurance backed guarantee, then please get in touch today.
Call us on 01932 868 700 and we will be happy to help.