Untangling a knotty issue
Everyone enjoys seeing the first signs of spring, but the growing season also causes less welcome plant life to wake up. And as sure as summer follows spring, the problem of Japanese knotweed reappears every year.
Following a 2019 report by the House of Commons Science and Technology Committee, where MPs said mortgage lenders’ approach to knotweed was “over cautious”, a new RICS guidance note has been issued that reflects an improved understanding of this invasive plant. It’s intended to correct public perception of the actual scale of issue, and redress problems that reaction to earlier guidance had caused in the market.
The main focus is abolishing the ‘seven metre rule’ that valuers used when determining whether knotweed poses a threat to a property. This earlier guidance stated that if Japanese knotweed was found to be growing within seven metres of the property’s boundary, it could slash 15 percent off its value and a mortgage may not be offered.
Nic Seal, of knotweed specialists Environet UK, has welcomed the new guidance. He commented[i]: “The new Guidance Note is cautious and sensible, recognising the very real risk Japanese knotweed poses to homeowners and lenders, and giving greater clarity to surveyors.
“The blunt ‘seven-metre rule’ has rightly been scrapped in favour of a more nuanced approach that allows surveyors to use their own professional judgement in determining the potential impact of Japanese knotweed. I’m pleased to see the focus is no longer only on the structure of the property and the risk of damage, which is rare, but also on amenity value – in other words, the effect of knotweed on the use and enjoyment of the garden.
“Equally importantly, it also recognises the problems that can result from encroachment of knotweed from adjoining land, requiring surveyors to flag infestations within three metres of the boundary on neighbouring properties.”
The new, less rigid guidance is good news for homebuyers, asking surveyors instead to use their discretion to determine the potential impact of this invasive plant. But it’s still true that no one wants to buy a property only to discover that it, or an adjoining property, has a knotweed infestation as it can cost thousands to eradicate. So there is little doubt of the value of having an indemnity policy in place as a precaution, especially as things turns greener.
An insurance solution
Every spring and summer, we see a spike in enquiries requesting quotes for our policy, as well as policyholders contacting our claims team as signs of the weed appear on their property. Having a Japanese knotweed indemnity policy in place will mitigate any financial risk by protecting your client if they discover knotweed after they purchase the property.
We’ll cover them for the costs of treating the infestation, the costs of repairing any damage the weed might have caused, as well as legal defence expenses if the weed has spread to a neighbouring property. We will also cover any reduction in market value, resulting from a claim, when your client sells the property. Our policy isn’t limited only to Japanese knotweed - cover includes both Bohemian and Giant knotweed hybrid species.
And a block insurance scheme makes it even easier for you to arrange cover, giving you the ability to protect your clients without having to obtain separate quotes for each individual property. So if your firm handles a substantial number of property transactions every month, it’s the perfect solution. Better yet, depending on how many transactions you intend to cover with the scheme, the premiums can be significantly discounted.
Premiums start from as little as £67 for a £100,000 limit of indemnity, and block policies between £20 to £30 per transaction. Quotes can be obtained by calling 01603 617617, emailing email@example.com or by visiting cli.co.uk.