Sources at two of the UKs major mortgage lenders (Santander and Barclays) have recently advised that they do not automatically decline property where a valuer has reported the presence of knotweed.
These lenders will provide mortgages but in summary will need to see the following undertaken by a PCA IWG member (Japanese Knotweed Ltd):
- Survey: A specialist knotweed survey to record the knotweed problem and establish the property risk category (if this has not already been done by a RICS surveyor).
- Remediation: Commencement or completion of the recommended remedial works to treat or remove the Japanese knotweed.
- Guarantee: A guarantee to be provided by the specialist who carries out the remedial works. Provision of a guarantee certificate also demonstrates that the programme has been paid for in full (important when this applies to a long term treatment programme).
In respect to the Remedial works and the Guarantee it is important to note that each lender may have their own specific requirements. Remedial works may involve either long term treatment with herbicide or instant eradication via excavation. The level of property risk posed by the knotweed should dictate the remedial method recommended by the knotweed specialist.
There are several types of Guarantee and duration which can be provided. Barclays for example request a minimum 10 year Insurance Backed Guarantee from a PCA IWG member. Santander however will look to see the guarantee funds secured in a third party fund protection scheme such as Escrow or Bondpay.
- Verification Visit to establish the presence of Japanese knotweed
- Specialist Knotweed Survey to record the problem and propose remedial action
- Treatment or Removal of Japanese knotweed
- Guarantee or Insurance Backed Guarantee of 2-35 year duration